TechFlow news, on November 13, according to Jinshi Data, JPMorgan's market team believes inflation data is more likely to heat up than cool down. Nevertheless, they think hotter data this week is unlikely to derail the current risk-on sentiment, and investors are unlikely to fixate on a single data point, given that another CPI release will precede the December Fed meeting.
However, the team cautioned investors that Powell has shifted the Fed’s focus from the labor market to balancing its dual mandate of employment and inflation. "If data such as CPI or even retail sales indicate a stronger growth trajectory that also fuels inflation, then we need to pay attention to what might come next," they said.
In JPMorgan’s view, investors are unlikely to adopt a more cautious portfolio stance until they see overall CPI annual rates reach 3.5%—a level they consider a credible threat to the Fed. They believe only if inflation returns to or exceeds 4% would the Fed take tightening actions.
