Thursday, Sept 14, 2023

regulatory overreach, and the non-reaction to CPI

“Well, all information looks like noise until you break the code.” – Neal Stephenson ||

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IN THIS NEWSLETTER

• CPI: Just what we thought

• The SEC goes after creators

• Regulating DeFi

WHAT I’M WATCHING

CPI: Just what we thought

Yesterday’s US CPI data came in slightly worse than expected – the index came in as expected for August with a month-on-month rise of 0.6% vs July’s 0.2%, but the annual increase was slightly higher than forecast at 3.7% vs July’s 3.2%. Month-on-month core CPI inflation, stripping out energy and food prices, was also slightly higher than expected at 0.3% vs July’s 0.2%.

This reinforced market conviction that we’re at peak rates: a pause at next week’s FOMC meeting is pretty much a lock-in (at 97% probability), but the likelihood of a pause at November’s meeting moved up to 63% from 53% just a week ago. Not conclusive yet, but signaling that the swaps market didn’t think the inflation bumps were anything to worry about.

(chart via CME FedWatch)