Data Supporting Dovish Narrative and CPI Expectationsđ
Data was cooperative as well to the dovish narrative, with the NFIB survey reporting 'credit harder to get' jumping to the highest levels since March, while the Fed's Survey of Consumer Expectations showed long-term median inflation expectations dropping by 0.2% to 2.8%. We will see a release of the Fed's somewhat stale FOMC minutes tonight, though the impact will likely be muted ahead of Thursday's CPI. The street is expecting a 0.3% print with GS calling for downside risk due to weaker used car prices and steady shelter inflation. Furthermore, with the dovish turn in expectations today, the hawkish hurdle has been raised and we would probably need a >0.4% print to reverse some of the recent market strength.
