Tyler Durden around sunrise Wednesday:
The US CPI report will be the main highlight tomorrow, and will also serve as what JPMorgan calls a “market clearing event.” While the BBG median consensus expects +8.8% YoY vs. +8.6% in June, Goldman and JPM expect 8.88% and 8.7% respectively, with whisper numbers at, or above, 9.0% …
So paranoid is the market, and so gullible about “bad news” tomorrow, that none other than the US government’s Bureau of Labor Statistics had to ease traders’ nerves, saying that the “leaked” report was indeed a forgery.
“We are aware of a fake version of the June 2022 Consumer Price Index news release that is being circulated online,” BLS spokesperson Cody Parkinson told Bloomberg said in an emailed statement.
Which of course is not to say that tomorrow’s CPI print won’t be 10.2%, although that would be especially cruel. As a reminder, a on Monday we showed why a case for a sharply higher 9% headline CPI print tomorrow is possible, but that most likely will also be the peak as numbers grind lower afterwards, at least until gasoline prices soar again.
Then, the Wall Street Journal reported:
U.S. consumer inflation accelerated to 9.1% in June, a pace not seen in more than four decades, adding pressure on the Federal Reserve to act more aggressively to slow rapid price increases throughout the economy.
The consumer-price index’s advance for the 12 months ended in June was the fastest pace since November 1981, the Labor Department said on Wednesday. A big jump in gasoline prices—up 11.2% from the previous month and nearly 60% from a year earlier—drove much of the increase, while shelter and food prices were also major contributors.
The June inflation reading exceeded May’s 8.6% rate, prompting investors and analysts to debate whether the Fed would consider a one-percentage-point rate increase, rather than a 0.75-point rise, later this month. Slowing demand is key to the Fed’s goal of restoring price stability in an economy that is still struggling with supply issues, but raising interest rates also elevates the risk of a recession.
Core prices, which exclude volatile food and energy components, increased by 5.9% in June from a year earlier, slightly less than May’s 6.0% gain, the Labor Department said.