The market’s short-term direction is uncertain ahead of Wednesday’s inflation report. JPMorgan has broken down how different numbers will impact the market. The Bureau of Labor Statistics will release its December consumer price index reading at 8:30 a.m. ET, with expected annual inflation rates of 2.9% and 3.3%.
The S&P 500’s reaction to the report depends on the core CPI number. JPMorgan forecasts a knee-jerk rally if the reading falls within 0.17-0.23%, leading to a potential gain of 1-1.5%. However, a range of 0.23-0.30% may result in a loss of 0.75-1.25%.
The inflation report could influence the Federal Reserve’s interest rate policy this winter. Despite market expectations that rates will remain steady at 4.25-4.50%, Chairman Jerome Powell may lay groundwork for future rate changes at his press conference.
Key statistics:
* Expected annual inflation rates: 2.9% and 3.3%
* Core CPI range: 0.17-0.23%
* Potential S&P 500 gain/loss ranges: 1-1.5% / 0.75-1.25%
* Expected Federal Reserve interest rate policy: Steady at 4.25-4.50%
Source: https://www.cnbc.com/2025/01/14/jpmorgans-view-on-wednesdays-inflation-report-and-how-the-market-may-react.html