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.

The video in this report is only accessible to members
The video in this report is only accessible to members
The video in this report is only accessible to members
The video in this report is only accessible to members

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).

The video in this report is only accessible to members
The video in this report is only accessible to members

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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