I am leaning toward a slightly hotter CPI print tonight. The jobs data has held up much better than expected, while oil above $100 adds another layer of inflation pressure. My call for core CPI YoY is 2.5% or higher, so I am going with 1C.
For headline CPI, I also expect some upside pressure from energy prices, but I do not think it will move dramatically away from expectations. I am calling 2B for 3.4%. For core CPI MoM, I think 0.2% is still the most likely outcome, so my third call is 3B.
My final answer: 1C 2B 3B. I think tonight's data could strengthen the case for higher-for-longer rates, so I would rather stay patient and avoid chasing the market until we see how investors digest the CPI and the Fed's next move.
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