According to BlockBeats, on November 13, JPMorgan's market team suggested that inflation data is more likely to show an increase rather than a decrease. Despite this, they believe that hotter data this week is unlikely to derail the tone of risk appetite, as investors are not expected to focus solely on one data point. This is because there is another Consumer Price Index (CPI) release before the Federal Reserve's December meeting. However, the team cautioned investors that Federal Reserve Chair Jerome Powell has shifted the Fed's focus from the labor market to balancing its dual mandate of employment and inflation. They noted that if CPI or retail sales data indicate a stronger economic growth trajectory while also fueling inflation, it is necessary to pay attention to future developments.
JPMorgan believes that investors are unlikely to adopt a cautious portfolio stance until the overall CPI annual rate reaches 3.5%, which they consider a credible threat to the Federal Reserve. They assert that the Fed will only take tightening action if the inflation rate returns to or exceeds 4%. This perspective highlights the importance of monitoring inflation trends and economic indicators closely, as they play a crucial role in shaping monetary policy decisions and investor strategies.