Did the inflation report come in hot? Not exactly, reports are focusing on inflation surging highest since April, but that is just a hook to overdramatize the situation. Reality is that inflation came in at an acceptable rate. This is proven by looking at the FED watch and expectations of further cuts. Looking at the CME Fed Watch we see that the expectations for another cut in December shot up from 88.9% to 96.4% odds that we are getting a cut in December.

The January report since before this latest CPI report always showed that we were never getting a cut and after todays report it barely budged. See below

As for the March meeting, not much has changed, the market still priced in another 25bps cut which only budged from 54% odds to 55%.

I wouldn't call this a ball busting report. In fact its quiet boring and underwhelming. However, for the sake of headlines, many will overdramatize it for clicks.

And if you’re not convinced yet, just look at the Equities market, the NASDAQ Composite is up 1.25% so far and the S&P is up .77%.