Probabilities suggest "hot" Feb core CPI above consensus of +0.30%. Jan "hot" CPI drove a 3% sell-off. But with "gas in the tank," this is a buy the dip moment.

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VIDEO: February CPI is reported on Tuesday. I think there’s a risk that it’s a hot number, but it’s probably similar to January when you wanted to buy that 3% pullback that follows a hot CPI.

Please click below to view our Macro Minute (duration: 4:14).

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Feb CPI is set to be released on 3/12 Tuesday at 8:30am ET, and it is an important day for bond and equities and Fed watchers. To us, we lean towards this being a "hot" CPI print, meaning the inflation for Feb core CPI likely is above the Street's +0.30% MoM. But we think this proves to be a "buy the dip" moment:

This is a consequential CPI print, given the "hot" Jan CPI triggered a deluge of market top-callers, who then proclaimed inflation is re-accelerating. And some even suggested the Fed will not cut interest rates in 2024, because the economy is too strong and inflation is re-accelerating. The bond market has stuck to this view, to an extent, as 1-yr inflation breakevens are back to 4% and the 10-yr yields surged after the Jan CPI. This is a reason many equity investors have become wary and even suggest the stock market is vulnerable to a bad CPI print. To me, it seems like there is a possibility that a "hot" Feb C...
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