Part 2/8:
For the last fourteen days, the market has seemed to oscillate erratically. Following strong Producer Price Index (PPI) data that exceeded expectations, investors swiftly reacted, changing sentiment throughout the day. As a critical measure of inflation, the CPI report was anticipated to provide clarity, but the results only added to the existing confusion.
The monthly CPI reading was up 4%, surpassing expectations of 3%, which at first glance seems negative. However, a deeper look at the core CPI—which rose only 3.2%, slightly below the anticipations of 3.3%—provides a counterpoint. Additionally, the year-over-year CPI showed an increase of 2.9%, matching expectations, leading to further ambiguity regarding the economic outlook.