Markets Braced for Wednesday's CPI Report, Inflation Expected at 3.4%

Anticipation is building in financial markets ahead of the Consumer Price Index (CPI) report due on Wednesday, with expectations that inflation will increase to 3.4% from 3.2% the previous month. Various financial institutions, including Bank of America at 3.3%, Barclays, Citi, Goldman Sachs, JP Morgan, Morgan Stanley, HSBC, UBS, BMO, TD, Citadel at 3.4%, and Wells Fargo and Scotiabank at 3.5%, have projected inflation estimates, with a median expectation of 3.4%. Wall Street shows signs of concern as the upcoming CPI data could challenge the Federal Reserve's inflation outlook for 2024. In response to the uncertainty, implied volatility on the S&P 500 has surged to a +58% premium, indicating expectations of larger market swings. The CPI report is scheduled for release at 8:30 am.