Investors, CPI, And The Fed Rate Decision Later This Week -- December 12, 2022

CPI and the Fed rate: a reader sent me this note earlier this evening --

The single piece of data that's most likely to impact the Fed's coming rate decisions is the rate of inflation. At 8.30am ET on December 13, 2022, the U.S. Bureau of Labor Statistics will release Consumer Price Index (CPI) data for the month of November 2022.-- Nov 28, 2022

My not-ready-for -prime-time reply: 

Thank you.

My immediate thoughts.

JPow really, really, really wants to hold at 50 bp.

He will hold at 50 bp if the number tomorrow is "reasonably" close to his expectations.

The number will have to be really, really atrocious for JPow to go to 75 bp just before Christmas with house prices plummeting.

I would assume the number was known today (if not last Friday) and the number was being circulated among policy makers like JPow today (and possibly over the weekend).

Many folks would have seen that number by now.

The fact that the market shot up 500 points today suggests the number (the CPI) found its way to Wall Street and folks, though they don't know what JPow will do, feels the number is reasonable enough to allow JPow to stick to 50 bp.

It's impossible for JPow to go to 25 bp but if the CPI number floating around was really really "good," suggesting JPow might go to 25 bp, the market would have been up 1000 points today.