Watch BEFORE CPI & Nick T **FED LEAK**

now it's time to buckle up for CPI and

once again what Nick T just said yes

Nick T the boy that we call Nikki leaks

because somehow he just always knows

what the FED is up to and so we listen

to him like a hawk I wonder if the fad

has calls on the Wall Street Journal I

don't know but they always seem to have

the answers now what do we have for CPI

projections and then what did Nick T

just say well number one

CPI comes out this week

so I have actually quite a few catalysts

this week this weekend I want to read

off some of the expectations for you but

uh on the 13th we are going to get our

CPI read we are looking at a CPI read

month over month of

0.6 that's pretty substantial one of the

reasons it's so substantially high is

Energy prices have gone up they've gone

up quite a bit we're already at about 54

estimates right now so the numbers that

I'm giving you are consolidation of

roughly 54 estimates and these are from

different banks this is like your

Barclays your Bank of America uh it's

also from a researchers like Bloomberg

Morgan Stanley JP Morgan whatever uh

visas even in here with a CPI estimate

and I always think that's really

incredible because Visa like is watching

consumer credit card spend and such and

so you know they kind of see what's

going on it's like oh those uh those

apples you know cost a little less last

month right uh anyway so all these

estimates combined we're looking at CPI

core month over month coming in at just

point two percent uh we actually believe

that point two percent could be as low

as 0.16 to potentially

0.18 a percent uh and uh we'll see what

actually ends up coming out but anyway

0.2 would be the rounded number for core

CPI year over year actually expected to

accelerate from 3.2 to 3.6 percent again

heavily the result of energy prices

natural gas making up somewhere around

six well natural gas and gasoline come

on making up about 60 percent of the

energy component is driven by gas and

gas has gone up so it's problematic it's

problematic to see gas prices up like

this and gas prices and oil prices going

up do also do something known as

tightening Financial conditions which

the whole purpose of raising interest

rates is tightening Financial conditions

so Financial conditions are already

Rising because Energy prices are going

up you actually have this potential for

the FED saying look we definitely need

to pause in September that's basically

clear but that they might actually even

be done because Energy prices have

Financial conditions as tight as uh we

had this sort of little double Peak here

recently at the beginning of August as

Energy prices were Rising they went up

to to roughly about a hundred golden

Goldman Sachs Financial conditions index

it's at roughly 100 Now 99.93 you kind

of have this weird little reverse Head

and Shoulders pattern recently but if

you go before that we actually didn't we

weren't at these levels since May or

right before the banking crisis so so

these are these are higher levels of

tightness we were a lot less tight in

terms of financial conditions the end of

May June July April uh so things are

tighter now uh and we expect the Federal

Reserve to respond to that we'll look at

some of this uh Nick T talk in a moment

about that

CPI core year over year expected to come

in at 3.6 that's about up from 3.2 in

the prior uh so uh sorry uh that's the

uh non-core number and then core year

over year we're looking at again that

4.3 down from 4.7 so core shrinking

again great uh the day after that on the

14th we'll be getting retail sales we're

looking for retail sales to pop up just

0.1 percent way softer than the 0.7 we

had in Prior month and if you exclude

autos on a month over month basis we

expect to be at 0.4 versus the one

percent we had previously again way

softer uh then we're expecting PPI this

is your producer price inflation numbers

on the 14th the 14th is uh is PPI uh uh

you know PBI data release day it's also

the day before the coupon expiration on

the 15th link down below for the

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expiration this Friday uh so ppi is

expected to come in at X food and energy

point two versus point three prior PPI

uh month over month non-core expected to

be 0.4 versus 0.3 prior you've got uh X

food energy trade expected to be just

point two percent we really want to see

those numbers come in to 0.2 percent

especially if the average is below that

which it likely will be the average is

likely to be somewhere around 0.16 0.18

which actually if you then annualize

that figure all you have to do you don't

have to go exponential here you take

like let's take the average of that and

go

0.17 for example we multiply that by 12

and you're essentially at two percent

inflation 2.04 it's the same thing as

basically being at two percent inflation

that's what the fed's looking at anyway

we know know that that mean inflation

Trends have been trending towards two

percent already we mostly expect

inflation Trends to be moving right

towards two percent the concern is Will

these higher energy prices unanchor some

of these core prices core Services

obviously TBD a lot of uncertainty

around turns in the business cycle uh

then uh we'll get University of Michigan

consumer sentiment estimates expecting

that one-year inflation Target to still

remain 3.5 uh and five to ten year to be

around three percent and then uh you

know a couple weeks from now we'll we'll

be back at a Fed meeting actually less

than that and it'll uh it'll be on the

20th so we're about nine days away from

the next fed meeting so those are big

now what does Nick T tell us let's go

ahead and jump on over here to Nick T's

latest Nick T's tweet uh which isn't

loading right now there it is fed

officials are turning more cautious all

right we'll let that load right there

here we go fat officials turning more

cautious uh in the path towards their

final rate hike uh and uh that's gonna

be a big deal we're gonna go through the

article on this generally more cautious

about raising rates too high now that

inflation is finally showing signs of

Rapid declines that they long

anticipated a rate pause in September

will give the FED more time to see if

recent progress has continued yes let's

go ahead and look at some of these

details uh by the way yesterday was the

10th it was my dad's birthday happy

birthday dad

all right so take a look at this for

more than a year fed policy makers were

unanimous that they would continue that

they would rather raise rates too much

than two later uh too little and too

later listen to this this is changing

ooh Some officials still prefer to err

on the side of raising rates too much

reasoning that they could cut them later

now though other officials which could

actually be more or the majority of

officials other officials quote see

risks as more balanced they worry that

raising rates and causing a downturn

that turns out to be unnecessary or

triggering a new bout of financial

turmoil or Black Swan basically would be

unnecessary in other words they have to

consider the human cost of their

decisions why would you lead to people

losing their jobs and business

bankruptcy if you don't have to if

inflation is indeed transitory why

destroy the market and that's been the

biggest bear argument for the past year

is that the FED is going to overdo it

that is a risk factor

still is but Nick T is telling us

hey wait a minute we might have a chance

here to um

to just be done

the shift towards a more balanced bias

on rates is driven by data showing

easing inflation and unusually rapid

increases or as a result of the

unusually rapid increases of rates that

we've seen over the last year the bigger

debate is what would prompt them to

raise rates again in November or

December in June most officials

projected that they would need to raise

rates by another quarter point this year

projections to be released at the end of

September this is September 20th we're

going to be getting the sap again it's a

big deal it's going to be a big fed

meeting sap the summary of economic

projections right big deal but anyway

whether they deliver such an increases

open to question for the past year

officials have placed the burden of

evidence of slowing economy to justify

pausing rate increases as inflation

cools the burden has shifted towards

evidence of an accelerating economy to

justify High rates but it's not just an

accelerating economy If people really

forget this and I really want to remind

you of this

yes there's a coupon code this Friday

you can email us at staffing.com if you

need a bundle but what I really want to

remind you of is remember folks it is

not an accelerating economy that's the

problem an accelerating economy is okay

it's an accelerating economy

where inflation is de-anchoring

as long as inflation doesn't de-anchor

continue to to go up or go up again

rather I should say as long as that

doesn't happen you can have a strong

economy because what does a strong

economy do provides more employment for

whom specifically does it provide more

employment well historically it provides

more employment towards lower income

individuals this has been a little bit

skewed because of covid and there have

been a lot more blue-collar jobs and

service jobs than there have been White

Collar jobs

so you've had this sort of weird dynamic

now but usually the Federal Reserve is

highly sensitive to offending uh the the

the growth of basically poor individuals

being able to participate in a good

economy it wasn't until about 2018 that

drone PALS like we finally see a more

broad-based income demographic

benefiting from a strong economy and

then covet hit and ruined everything so

this is something they're definitely

paying attention to and that human cost

matters matters a lot

let's keep going for the past year

officials have placed the burden of

evidence slowing uh inflation okay but

inflation has started cooling recently

described that firmer than expected

economic activity could could basically

slow uh progress on inflation but he's

using the word could instead of wood and

this is basically a flip-flop to argue

that like hey maybe maybe what I just

described a strong economy does not

necessarily mean all your inflation

one Camp of officials is still anxious

about the increase in inflation and

wants an insurance policy by raising

rates this fall which is also kind of

interesting because that's one place

you're still seeing inflation go up is

insurance that doesn't have to do have

anything to do with what really Nick T

is saying here right now but insurance

prices have been going up a lot so much

so that some homeowners are just not

having insurance at all anymore they're

self-insuring which is very risky

especially in places like Florida just

looking at real estate Florida I grew up

in South Florida anyway over tightening

is a risk but we've been underestimating

inflation

allowing inflation to be up for longer

does carry a cost for the economy if it

turns out such an increase had more of a

negative impact than expected I'd be

more willing to cut the rate a little

bit faster I don't think one more rate

hike would necessarily throw the economy

into a recession if we did feel that we

needed to do one right so skipping

doesn't necessarily imply stopping a

higher for longer blah blah blah blah

okay I want to be very clear while they

argue they're at the fine tuning stage

there's a psychology to being at the

fine-tuning stage you could literally

think at the fed or done that we've done

enough

and you would guess what you would still

tell Nick T in the world

hey we might do one more

they're keeping that door open of course

because as soon as they say we're done

you're gonna see a big fat rally in the

stock market a big fat collapse and

treasury yields and that'll instantly

loosen credit conditions and financial

conditions what's actually wild right

now is that while oil is falling in the

pre-market and stocks are actually Green

in the pre-market look at that 10 year

10 years up another 3.4 bips people

really think worse the fed's not done

yet so fed is done that yield comes

right down so it's pretty exciting it's

exciting times it's uh the turn of a

turn of the Eco cycle here and uh Nick T

is uh somewhat suggesting that uh this

uh this could be it what could be done

but the FED might be back to considering

the human cost of raid hikes and Nick T

after all is the as we call the FED

Whisperer as far as inflation inflation

numbers are expected to be benign here

uh in two days it'll be big though

because if the estimates are wrong and

it comes in hot

we'll start penciling in that rate hike

for uh for November December we'll

probably still get the pause in

September but November December we'll

definitely price that in right now by

the way it's uh it's worth looking at

some of the uh recent numbers that we

have for uh terminal rate

and we'll also look at the five-year

break even and five year forward so

right now the FED term rates expected to

be about 5.44

it's been pretty stable uh again 5.37

implies the fed's done so any number

above that getting closer to

5.625 is uh is a limit

five year break evens up at 2.3 percent

a little elevated and a little elevated

on the forward break even as well at uh

2.35 2.3 and 2.35 for these two numbers

for five year breaks so uh I think CPI

will really affect that in two days so

buckle up for CPI and of course the

expiration of the coupon code this

Friday it'll be a big one be the last

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people are looking for real perspective

not some of the basic perspective that's

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for entrusting me in that uh similar

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at Sakai all these things are linked

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all there this little thing at the top

you can click on it shadowing statcack

and all the other stuff so anyway we've

obviously covered uh the complete

consensus of forecasts and we'll discuss

those in more detail but most

importantly we want to highlight Nick T

our fed Whisperer Mr Nikki leaks Wall

Street forecasters expect August CPI to

show headline Rose 0.6 in July boosting

the 12-month rate to 3.6 from 3-2 thanks

to Energy prices remember gas generating

around 60 of that headline movement they

see core CPI 0.2 percent lowering the

12-month rate to 4.3 from 4.7 in July

and these are some of the breakdowns

over here of uh that core level look at

those core estimates I mean the highest

one over here is 2.5 or well 0.25 but a

lot over here 0.15 0.18 this is where I

lean over here in this lower area 0.14 I

know what advertise these things that

you told us here I feel like nobody else

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congratulations man you have done so

much people love you people look up to

you Kevin path right there financial

analyst and YouTuber meet Kevin always

great to get your take