From the data, the announced CPI is higher than expected, which is bearish! Please pay attention to risks! It is recommended to appropriately reduce some positions to avoid large drawdowns! After the pullback stabilizes, consider re-entering the market!
Generally speaking, a CPI data lower than expected is better.
Previous CPI value: 2.7% Current CPI market expectation: 2.9%
Previous core CPI value: 3.3% Current core CPI market expectation: 3.3%
Therefore, this CPI data is higher than expected, which is bearish!
CPI stands for Consumer Price Index, reflecting the price level changes of goods and services typically purchased by households. If the CPI is higher than expected, it means that price increases exceed expectations, which can have many adverse effects. For example, it can increase the cost of living for residents, reducing the amount of goods and services that can be purchased with the same amount of money; it may also trigger inflation, and if inflation is too high and persistent, it can disrupt economic order and affect the stable and healthy development of the economy.
Conversely, a CPI lower than expected indicates that price increases are relatively mild, or even that prices may be stable or declining, which is beneficial for residents to maintain a relatively stable cost of living. However, if the CPI remains too low, even leading to deflation, it can also have negative impacts on the economy, such as causing a decline in corporate profits and a reduction in investment.