I have been very busy these days, but I still found some time to talk to my friends about CPI. So when the CPI data came out, the trend of the market should be within everyone's expectations. What is the most important thing after the CPI data came out this time? As I have said before, for most friends, the broad CPI is inflation, and for inflation, whether it is within expectations is very important. Today's broad CPI not only exceeded last month, but also exceeded the expected value. What is the psychological expectation? That is, the Federal Reserve will not rush to cut interest rates. This matter has actually been said many times. For the market, it is good to be able to cut interest rates three times in 2024. Before, it was expected to cut interest rates twice.
But is this a terrible negative? Not necessarily. The core CPI, which is the core inflation (core PCE) that the Federal Reserve is most concerned about, is higher than expected, but it does not exceed the value of last month. In other words, although it is not very good, it is not very bad. This kind of data actually has limited impact on the market. If there is no rate cut in May, there should be no need to gamble now, unless the unemployment rate in April jumps directly to more than 4.5%, which is still too unlikely. Otherwise, the probability of the Fed moving interest rates in May is not high. Some friends are worried about whether there will be a rate hike. This is a bit too much worry. At least the current inflation is not enough for the Fed to break the interest rate. The previous ones are all nonsense, and I have said it dozens of times. Looking back at the data of#BTCand #ETH, although the price has fallen now, this is the reaction of market sentiment, which is actually a short-term effect. My personal opinion is still that it is not necessarily correct to be bullish when it rises and bearish when it falls.
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