Tonight's CPI Preview: Inflation Expectations Clash, Gold Bulls and Bears Battle! Here's How to Manage Risk and Stay Steady

Why does the market have little reaction to this CPI?

Despite an expected annual rate of 3.1%, it contradicts the narrative of slowing inflation. The core reasons are threefold:

First, the data itself is unreliable. The U.S. government shutdown disrupted October data, resulting in missing figures that can't be recovered. This report lacks month-over-month comparisons, only providing incomplete year-over-year data. November data was also compiled using non-January sources and non-survey channels. Goldman Sachs mentioned that holiday promotional biases could underestimate core CPI by 0.15 points, significantly reducing the data's reliability.

Second, the Federal Reserve is no longer focused on inflation. Its current priority has shifted from "controlling inflation" to "maintaining employment." Weak employment figures are now the key to policy adjustments. The mild decline in inflation has already created room for rate cuts. As long as CPI doesn't deviate too far, it won't fundamentally alter the current policy stance, making the data less impactful.

Third, policy expectations have already been advanced. Powell is set to step down in May next year. The popular successor, Haskett, has a higher tolerance for inflation. Plus, the Trump administration's attitude toward rate cuts has become a standard for appointments. The market has already bet on significant easing in the future. The current CPI's short-term impact has been largely diluted.

Tonight, focus on volatility! Brothers, either trade lightly or stay on the sidelines. Resistance at 4350 is strong; consider a small position with a stop-loss at 4360, targeting around 4300.

If 4300 holds tonight, reverse and go long, aiming for 4350-4380!