Today's CPI brings as much panic to the market as it did in June, and the stock index slump is not sell the news, but indeed the pot of the core CPI. The consensus expects core cpi to grow by + 0.3 per cent month-on-month, resulting in + 0.6 per cent.
The most intuitive feeling for the market and the Fed is that the core cpi accelerated again, raising interest rates and raising interest rates made it lonely.
Especially looking at housing, from + 0.6 > + 0.5 > + 0.7, there is obviously no sign of slowing down.
The Fed usually has more direct control over the housing market, and the acceleration of housing now sends a signal to the market and the Fed that interest rates will continue to rise.
This is no longer a matter of staying hawkish next year and keeping interest rates high until inflation comes down.
But this year, the end-point interest rate of 4-4.25% is enough for hold core inflation.
At a time when the end-point of interest rate hike is expected to rise, equity assets that have already priced the end-point 4% interest rate will have to be repriced. Higher end-point interest rates also mean a higher possibility of recession, which has led to a deepening of today's 2-10-year Treasury yield spreads.
In fact, this round of rebound in US stocks is not about the pricing of interest rate cuts next year.
Since July, the US economy and employment have been resilient enough in a pricing environment of 4 per cent end-point interest rates, with strong data suggesting the possibility of a soft landing.
As long as inflation falls faster than nominal GDP, equity assets still have allocation value.
But now this cpi data has brought more uncertainty than expected and opened up.