Fed Unlikely To Pull The Trigger Before Midterms

In this piece, I look at what to expect from the August CPI report and where I stand going into the next FOMC meeting. Consensus expects 0.4% m/m headline CPI and 0.2% for core. I think core is the number that can change the market's tone heading into the September FOMC meeting. TD Securities sees 0.24% core CPI. A tiny upside miss could round to 0.3%, turning an almost-consensus print into a nasty headline. In fact, Continuum Economics expects 0.26% for core CPI, and Apollo flagged rising ISM Services Prices Paid as an inflation warning. As long as core CPI comes in below 0.4% m/m, I'm not buying the case for a September hike. That said, there are two big risks to my thesis. Jeremy Edwards/iStock Unreleased via Getty Images I can't remember the last time I cared so much about the release of a CPI report. Last week, I highlighted the bizarre price action in semis after a very hawkish unemployment report. Long This article was written by Deep Value Investing 14.53K Followers Follow Thematic. Top down. I often find the theme before I find the stock. My philosophy is that themes are often born quiet and die loud. I try to catch them while they're still finding their voice. When the music plays, I mainly chase pockets that rhyme with growth, momentum, perception shifts, and sometimes even the most absurd narratives (mostly AI-related). When the music slows and the tape deteriorates, I don't wait around. I raise cash/rotate out, and watch for the next setup. A parabolic run may trigger a similar move. During a bull run, you won't find much common ground between the deep value crowd and me. I liked the core ideas of deep value investors, and I briefly followed that philosophy. However, it demands patience, and the AI supercycle broke whatever patience I had left. The market changed, and so did I. My style is not set in stone. I’m mostly long when the music is playing. When it stops/slows down, I may dabble with shorts via put options, although it’s not my forte. My style is highly speculative. I have a high risk tolerance that most rational investors would find alarming. I don’t have a favorite timeframe. That said, I trade mostly the mid-term and the short-term. I have a pathetic low six-digit portfolio, and I consider myself part of the mid to low end of the K-shaped economy. It sometimes drops to the five-digit range when life has other plans. I've been in the game since mid 2024, although my first dabbles with stocks (i.e., burning $100 trading accounts in a matter of days) go back to the early/mid 2010s. I have a B.Sc. in aeronautical engineering and experience as a consultant in the aerospace sector. The latter statement is not relevant to my investment style, but I thought to add it for self-indulgent purposes. I live on the wrong side of the Atlantic. The opening bell is my lunch bell. I like astrology, so I’m a follower of technical analysis (mainly trends and support/resistance/psychological levels). I also look at the fundamentals of individual names, although the theme and the macro often prevail in my decision-making. I dislike empty suits, high-level BS, deep-level BS (especially), unnecessary jargon, and self-indulgent, third-person written introductions with an air of superiority. Analyst’s Disclosure: I/we have a beneficial long position in the shares of IWM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I am not a registered investment adviser, broker, dealer, or tax professional. This article, including any comments or replies I post, reflects my personal opinions only and is provided for informational and educational purposes. Nothing I write is investment, legal, tax, or financial advice, or a personalized recommendation t...