Why are US inflation reports less impactful for traders now?

The Federal Reserve is now prioritizing labor market data over smaller inflation movements, reducing the market's reaction to CPI reports.

How is the government shutdown affecting the November CPI report?

Disruptions from the government shutdown may have impacted data collection, potentially making the November CPI report less reliable.

What is the Federal Reserve's current focus regarding economic data?

The Federal Reserve is closely monitoring signs of weakness in the labor market, viewing it as equally, if not more, important than the CPI.

Home / Business and Economy / US Inflation Data Loses Its Grip on Markets

US Inflation Data Loses Its Grip on Markets

17 Dec

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Summary

Options traders anticipate smaller S&P 500 swings on inflation reports.
The Federal Reserve now prioritizes labor market weakness over inflation.
November CPI report may be less reliable due to government shutdown disruptions.

US Inflation Data Loses Its Grip on Markets

For years, the monthly US consumer price index (CPI) report dictated market movements. However, investor sentiment has shifted, with apathy now greeting the upcoming November inflation data. Options traders are betting on significantly smaller market swings compared to previous reports, reflecting a change in how the Federal Reserve is reacting to economic indicators.

The Federal Reserve's policy decisions are increasingly influenced by signs of labor market weakness rather than minor shifts in inflation. Recent data indicating a sluggish job market keeps the possibility of interest-rate cuts open for the following year. Furthermore, disruptions from a government shutdown may impact the reliability of the November CPI report, potentially making it less of a decisive factor for policymakers.