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DC Lite #427
"When Core CPI is above 3% AND rising, the Fed has only cut rates one time"
Daily Chartbook
August 22, 2025
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1. Data surprise. "My takeaway from Powell's speech today is that a September cut is still really down to forecasting the data -- the CPI and the NFP. True, the bias is somewhat in the direction of a cut, but I don't think the sureness in the market pricing accurately reflect the risk."
2. Fed cut vs. CPI. "When Core CPI is above 3% AND rising, the Fed has only cut rates one time (red vertical lines below). If August CPI prints above 3%, then a September cut would be the second case. The only other time the Fed cut under these conditions: Dec 2024."
3. Mag 7 vs. Bottom 493. "Balanced YTD returns for the Mag 7 and S&P 500 ex-Mag 7."
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4. SPX breadth. Short-term breadth has broken out while longer-term breadth has made new YTD highs.
5. SPX vs. breadth. "RIP bears."
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