How's CPI going to come out tomorrow
I can certainly help you track and make sense of tomorrow's release, but to tailor our session perfectly, what exactly are you hoping to track with it?
I'm tracking interest rates and Fed decisions
That makes complete sense—the Federal Reserve keeps its eyes glued to inflation data to decide whether to hike, cut, or hold interest rates, so tracking CPI is the perfect place to start.
Before we dive into how the CPI data shapes those Fed rate decisions, it helps to make sure we are on the same page about how the Fed views this inflation data. How familiar would you say you are with how the Federal Reserve uses inflation data to set benchmark interest rates?
I'm very familiar—let's get straight into CPI
Let's skip the introductory basics since you are already well-versed in how the Fed operates, and dive directly into how the market tries to predict the Consumer Price Index (CPI) before the Bureau of Labor Statistics releases the official data.
Understanding Consensus Expectations
Before the official CPI report is published, a flurry of activity happens behind the scenes. Financial media companies and research firms survey dozens of institutional economists to compile what is known as the . This represents the collective, median forecast of Wall Street.
At the same time, real-time statistical tools like the provide continuous, high-frequency estimates of inflation by monitoring daily commodity prices, retail sales, and fuel costs.
These projections are crucial because they dictate how the market is positioned ahead of time. Rather than waiting for the official release, trading desks and investment funds price their expectations directly into asset markets beforehand. As a result, the absolute CPI number matters less to the markets than whether the official print matches, beats, or misses this consensus estimate.
I've shown our custom learning roadmap above so you can see where we're headed. To help you see how these expectations are mapped out, let's look at how the consensus numbers are currently stacking up. I can set up a visual comparison of recent forecasts or we can jump straight into how these consensus figures translate into interest rate predictions. What sounds best?