{"id":273128,"date":"2022-11-08T18:09:47","date_gmt":"2022-11-08T18:09:47","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=273128"},"modified":"2022-11-09T15:14:02","modified_gmt":"2022-11-09T15:14:02","slug":"crypto-stocks-brace-for-thursdays-cpi-announcement","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/crypto-stocks-brace-for-thursdays-cpi-announcement\/","title":{"rendered":"Crypto, stocks brace for Thursday&#8217;s CPI announcement"},"content":{"rendered":"<p>Investors expect the Fed's aggressive program of rate hikes to level off once inflation shows signs of being reigned in. However, forecasts suggest the U.S. economy is far from cooling.<\/p>\n<p>Last month, famed hedge fund manager <a href=\"https:\/\/twitter.com\/WinfieldSmart\/status\/1580950865371725824\">Stanley Druckenmiller<\/a> pointed out the uncomfortable truth that historically, once inflation hits 5%, it has never reverted course without Fed funds rising above CPI.<\/p>\n<p>With September's CPI inflation running at 8.2% year-over-year, rate increases may have a long and painful way to go before the Fed eases off &#8211; piling on sell pressure in risk-on markets, including crypto.<\/p>\n<figure id=\"attachment_273168\" aria-describedby=\"caption-attachment-273168\" style=\"width: 456px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-273168\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/fed-vs-cpi.jpg\" alt=\"Fed Funds rate vs. inflation\" width=\"456\" height=\"496\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/fed-vs-cpi.jpg 1170w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/fed-vs-cpi-276x300.jpg 276w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/fed-vs-cpi-941x1024.jpg 941w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/fed-vs-cpi-768x836.jpg 768w\" sizes=\"(max-width: 456px) 100vw, 456px\" \/><figcaption id=\"caption-attachment-273168\" class=\"wp-caption-text\">Source: Bloomberg.com<\/figcaption><\/figure>\n<h2>CPI forecast<\/h2>\n<p>According to MarketWatch, overall CPI is expected to increase by 0.6% for October, to a year-over-year change of 7.9%.<\/p>\n<figure id=\"attachment_273241\" aria-describedby=\"caption-attachment-273241\" style=\"width: 737px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-273241 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/Capture.png\" alt=\"CPI forecast data\" width=\"737\" height=\"183\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/Capture.png 737w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/Capture-300x74.png 300w\" sizes=\"(max-width: 737px) 100vw, 737px\" \/><figcaption id=\"caption-attachment-273241\" class=\"wp-caption-text\">Source: MarketWatch.com<\/figcaption><\/figure>\n<p>Currently, markets are at a pivotal point. Either inflation cools, and central banks ease off rate hikes, or fixed-income yields continue making new highs, recession risk rises, and assets come under further pressure.<\/p>\n<p>This week\u2019s U.S. October CPI report carries considerable weight after the previous month saw little headway in reigning in core inflation, despite the past eight months of rate hiking.<\/p>\n<p>Slowing price gains for core goods prices were more than offset by faster price increases for services. The trend for 0.6% monthly increases in core CPI over the past year was bucked by just two smaller increases of 0.3% in March and July.<\/p>\n<figure id=\"attachment_273170\" aria-describedby=\"caption-attachment-273170\" style=\"width: 2149px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-273170 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/cpi1.png\" alt=\"Monthly change in core CPI\" width=\"2149\" height=\"604\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/cpi1.png 2149w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/cpi1-300x84.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/cpi1-1024x288.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/cpi1-768x216.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/cpi1-1536x432.png 1536w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/cpi1-2048x576.png 2048w\" sizes=\"(max-width: 2149px) 100vw, 2149px\" \/><figcaption id=\"caption-attachment-273170\" class=\"wp-caption-text\">Source: macroscope.substack.com<\/figcaption><\/figure>\n<h2>Equities are vulnerable; what about crypto?<\/h2>\n<p>Following the FOMC meeting on November 2, in which the U.S. central bank implemented a fourth successive 75 basis point hike, Fed Chair Jerome Powell said peak rates will be higher than previously expected. Market expectations are for a peak rate of around 5% by next summer.<\/p>\n<p>The chart below shows the S&P 500 and inverted implied Fed funds rate. Concerns are that equities are vulnerable to a further slide if the positive correlation reasserts itself.<\/p>\n<figure id=\"attachment_273172\" aria-describedby=\"caption-attachment-273172\" style=\"width: 2182px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-273172 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/sP-vs-fed.png\" alt=\"Fed funds rate vs. S&P 500\" width=\"2182\" height=\"687\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/sP-vs-fed.png 2182w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/sP-vs-fed-300x94.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/sP-vs-fed-1024x322.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/sP-vs-fed-768x242.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/sP-vs-fed-1536x484.png 1536w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/sP-vs-fed-2048x645.png 2048w\" sizes=\"(max-width: 2182px) 100vw, 2182px\" \/><figcaption id=\"caption-attachment-273172\" class=\"wp-caption-text\">Source: macroscope.substack.com<\/figcaption><\/figure>\n<p>In recent weeks, Bitcoin has shown a decoupling from stocks, leading to a return of the safe haven narrative. However, it remains to be seen whether this trend will continue to play out amid these unprecedented times.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Investors expect the Fed&#8217;s aggressive program of rate hikes to level off once inflation shows signs of being reigned in. However, forecasts suggest the U.S. economy is far from cooling. Last month, famed hedge fund manager Stanley Druckenmiller pointed out the uncomfortable truth that historically, once inflation hits 5%, it has never reverted course without [&hellip;]<\/p>\n","protected":false},"author":460,"featured_media":273614,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[77968,77911,77921],"tags":[],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Crypto, stocks brace for Thursday&#039;s CPI announcement<\/title>\n<meta name=\"description\" content=\"CPI inflation is forecast for another 0.6% monthly increase piling on sell pressure for risk-on assets.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/crypto-stocks-brace-for-thursdays-cpi-announcement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Crypto, stocks brace for Thursday&#039;s CPI announcement\" \/>\n<meta property=\"og:description\" content=\"CPI inflation is forecast for another 0.6% monthly increase piling on sell pressure for risk-on assets.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/crypto-stocks-brace-for-thursdays-cpi-announcement\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-08T18:09:47+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-09T15:14:02+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/11\/cpi-crypto-stocks.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Samuel Wan\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Samuel Wan\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/crypto-stocks-brace-for-thursdays-cpi-announcement\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/crypto-stocks-brace-for-thursdays-cpi-announcement\/\"},\"author\":[{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/samuel-wan\/#person\",\"name\":\"Samuel Wan\",\"url\":\"https:\/\/cryptoslate.com\/author\/samuel-wan\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/samuel-wan\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/samuel-wan\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/samuel-wan-author-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/samuel-wan-author-300x300.jpg\",\"caption\":\"Samuel Wan\"},\"jobTitle\":\"Analyst\",\"description\":\"Samuel Wan, a finance professional turned full-time crypto content creator, values individual autonomy and personal freedom in his pursuits.\",\"worksFor\":{\"@id\":\"https:\/\/cryptoslate.com\/#organization\"},\"sameAs\":[\"https:\/\/x.com\/WanSamuel\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/james-van-straten\/#person\",\"name\":\"James Van Straten\",\"url\":\"https:\/\/cryptoslate.com\/author\/james-van-straten\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/james-van-straten\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/james-van-straten\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/07\/cryptoslate-james-van-straten-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/07\/cryptoslate-james-van-straten-300x300.jpg\",\"caption\":\"James Van Straten\"},\"jobTitle\":\"Former Lead Analyst\",\"description\":\"James fervently appreciates data, technology, and trend-spotting. 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