Rise and shine everyone
Yesterday, we saw the market dive into the close. Many are saying this is because today’s inflation data release was leaked early. We’ll never know for sure, but if that’s the case, then we’re in for a surprise today.
But this is also another sign that the market remains lopsided, and why I said yesterday that putting on hedges is a good idea.
A hotter inflation number could mean no cut from the Fed in September. This wouldn’t bode well with the market.
Core goods inflation is the item that we want to keep an eye on. Core goods inflation, excluding vehicles, increased to 0.5% MoM in June, matching levels last seen during the pandemic reopening. When we’ve discussed the tariff pass-through previously, we said that July / August would be the print that would show a clearer picture of how tariffs may be weighing on the CPI numbers. We’re here now.
We can already see the increase coming through in last month’s heat map.
