Latest CPI Outlook The CPI will be released shortly What's important is the two circled in the picture One annual rate and one core monthly rate . The CPI annual rate above, 4.2%, is currently a very strong industry consensus This is a number that can be calculated based on the published data FactSet economist survey shows a median of 4.2% (manual survey) Cleveland Fed nowcast rolling reading 4.18% rounded to exactly 4.2 (machine model) 47% bet 4.2% on Kalshi (real bet) So when manual surveys, machine models, and real money all point to the same 4.2%, this CPI forecast is considered very strong .. But there is still a 32% stake and a 4.3% stake on Kalshi So in fact, the market has also priced a portion at 4.3% So the 4.3% market is not particularly surprising (mainly because rounding off some decimal points is likely to be on the edge of 4.2 and 4.3, causing differences due to rounding and rounding) But if it's 4.1%, it's very positive. (Low probability, market not fully priced) ------------------- The real disagreement lies in the core monthly rate below The monthly rate of core varies greatly . Goldman Sachs is the most dovish with 0.17%, while Xiaomo is the most eagle with 0.27% Cleveland Fed Model+0.31% (calculated using high-frequency data) On Kalshi, it is still more inclined to press 0.2% once . So whether traders bet 0.2% on model predictions or 0.3%, there is a huge divergence The core has significant differences because it is a guessed number. The focus of the guess is on the transmission of tariffs and air tickets on the commodity side. (For example, the pigeon says that the airfare has already been reduced, while the eagle says that it is because aviation kerosene has not yet been transmitted to the airfare.) ------------- So today's conclusion The CPI figure is likely to be ugly (4.2%, the highest in three years), but the market may interpret it as a peak, and oil prices have fallen in the past three weeks. Will the market cool down after real trading. What determines the market is whether the core CPI monthly rate is 0.2 or 0.3. The difference between this level will determine whether the Federal Reserve's dot matrix and attitude next week will lean towards an eagle or a dove (Walsh's first game) So if CPI>=4.3 and the combined core monthly rate is greater than 0.3 today, it is estimated that we will have to hit it again If CPI is 4.2, it still depends on whether the core is 0.2 or 0.3, and it also depends on the decimal point of the core Both 0.25 and 0.29 will be displayed as 0.3. The market reaction may be different, so we need to look for the text of BLS to see what the decimal point is If CPI<=4.1 core 0.2 or below. Inflation cools down, V reverses.