U.S. Inflation Data Anticipated to Show Mild Impact on Stock Market

According to BlockBeats, Wall Street's trading sector anticipates that the U.S. Consumer Price Index (CPI), set to be released this Thursday, will indicate higher inflation. However, due to the central focus on employment data in market narratives, significant stock market fluctuations are not expected. Stuart Kaiser, head of U.S. equity trading strategy at Citigroup, noted that options traders are betting on a 0.7% bidirectional movement in the S&P 500 index following the CPI release. This is lower than the average actual movement of 0.9% on CPI release days over the past year and also below the expected volatility for the upcoming employment report on October 3. Kaiser further suggested that even this implied volatility might be overestimated. The situation is closely tied to how traders interpret the Federal Reserve's interest rate trajectory. With U.S. employment data showing signs of weakness that threaten economic growth, the market anticipates that the Federal Reserve will lower the federal funds rate by 25 basis points at the conclusion of its meeting on September 17. Additional rate cuts are also expected in the meetings scheduled for October and December.