re: CPI comes in hotter than expected, futures down 1%+

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1. FOMC is officially on record now saying they anticipate it.

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"Anticipate" is a soft word to cover their asses in case they are wrong (like with inflation being "transitory"). It's not different than their saying "we think we may be able to make three cuts." It's not concrete, but they want it to sound as close to it as possible to keep the market happy. To underscore this, they initially anticipated three cuts for 2024. At this rate, that would be three cuts between May and December (one per quarter).

Rate cuts are done to spur growth but they can cause inflation (due to the extra liquidity in the economy). Inflation is still far from tamed, it's now increasing once again .3, .4 and .4 MoM (respectively) each month thus far and 3.1, 3.2 and 3.5 YoY (respectively).

The only way three cuts happen this year is if GDP and inflation drop significantly and unemployment rises significantly between now and May. I don't see any of those happening without some sort of black swan event.

Either that or JPow just says "frick it" and bends the country over to take a healthy slamming of runaway inflation up the arse.

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2. We’re barely in Q2

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But we know the direction inflation should be going but it's doing the opposite. Along with that, oil and gasoline prices are far more likely to make it increase more in the coming months.

Just creates bigger opportunities to buy calls and puts on the SPY. Buy calls in the support zones and puts in the resistance zones. In and out on the ODTE options can be very lucrative if you are disciplined with stops.

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It is kind of frightening how little ability there is in Washington to cut spending.

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They have all the ability in the world, they just don't have the desire.

Spending money helps elected officials in their eventual re-election efforts by giving them something to brag about to their constituents ("that new bridge I was able to get built" for example), something with which to leverage support from special interest groups ("I didn't do as much as you wanted, but I did more than my opponent would. Send me back and I'll keep fighting for you where they will work to shut you down") and funneling funds to groups and industries who will send some back to their campaign (for example: Lockheed Martin gives far more to incumbents than non-incumbents).

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It’s not going to happen though until there’s blood in the streets.

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Truer words... Sometimes I wonder if even that will do it for some of them.

Lol. Not true. Try again.

Even if this were a significant factor, tell me who would work those jobs? I have some exposure to immigrants working low wage jobs in construction. They are working because their employers can't find others to do the work. Even if they could, they would demand higher wages. I don't see any employers willing to pay higher than the minimum required to get the work done. The employers could change this anytime they wanted to, but capitalism keeps them from doing it.

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CPI comes in hotter

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Yep. Makes sense.

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than expected

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