The Federal Reserve’s policy meeting is next week’s big event, but Tuesday’s consumer inflation report could have more of an impact on markets and even help set the bank’s agenda. center. The consumer price index is unlikely to influence the Fed’s decision to raise rates by another 0.5 percentage point widely anticipated on Wednesday. But it could affect the tone after the meeting, both in the Federal Open Market Committee’s statement and how Fed Chairman Jerome Powell described the central bank’s battle with inflation at the end of the lengthy meeting. two days. According to Refinitv, CPI is expected to rise 0.3% on headlines and 0.4% on core, excluding food and energy. That compares with an increase of 0.4% for headline inflation and 0.3% for core inflation in October. John Briggs of NatWest Markets said: “I think the data could take a hit. to his press conference and how hawkish he is.” “If we had higher CPI figures, he might insist that we have to go further.” Briggs said the report will not affect the Fed’s quarterly forecast for inflation and interest rates, which will be released alongside a policy statement Wednesday afternoon. If CPI is hotter than the 7.7% year-on-year increase in October, the chairman could warn of a more aggressive agenda for the Fed, Briggs said. “It will force him to rush on two fronts. Destination [for rates] could be higher, and secondly, interest rates will stay higher for longer,” said Briggs.For now, many market experts expect the Fed to raise rates to 5% or more before stops next spring, currently at 3.75% to 4%, after six rate hikes The Fed is expected to reduce the size of the next rate hike by 50 basis points, after four up 75 basis points One basis point equals 0.01 percentage points recovered after last CPI but it fell after last Friday’s strong November jobs report and wages data was particularly strong in that release. There were 263,000 jobs created, plus wages growing at a 5.1% higher-than-expected rate year-over-year, Briggs said: “I’m a bit surprised that we can get rid of that much salary figure. If you get a higher CPI report thanks to that, it could create some significant markets.” Uncertainty ahead of the Fed meeting.” James Paulsen, chief investment strategist at Leuthold Group, said if the CPI isn’t as hot as expected, that could boost the market. “It can be very bullish, if it is big enough in terms of downside,” he said. “If it fits, maybe the Fed won’t be a big deal because people will know quite a bit about it. The dollar, the bond market, the stock market to some extent have depreciated and decided about 50 bucks.” fundamentals.” Paulsen said market sentiment is changing and investors are becoming more worried about the likely outcome of a Fed tightening than about why they’re raising rates. “I think the market is increasingly speaking up and ignoring the Fed. The main fear is inflation,” he said. “Recession has become the top fear.” Stocks were weaker in a tumultuous week, while bond yields were lower. S& The P 500 fell 2.7% in the week to Friday and the widely followed 10-year Treasury yield stood at 3.56%.Some strategists say the market is headed for a downtrend. due to recession fears and worries that earnings will be weaker when fourth-quarter earnings are announced, some expect the market will retest first-quarter lows. “If you’re more worried about a recession than inflation, that means you’re attracting more bond buyers,” he said. Bond yields fall as prices rise. “The more the Fed talks about raising rates, the more recession fears grow. More bond buyers are coming in.” Paulsen said he thinks it was inflation that pushed the market to its lowest point and now it’s priced in. “I’ve seen a new easing cycle. It’s happening,” he said. He also expects corporate earnings to not be as weak as some analysts expect.The weakening dollar, falling interest rates and falling commodity prices all have an effect. “Companies enjoy lower costs of capital and commodity prices for the first time. … We’re seeing a lot of stimulus being poured into this economy,” he said. Besides the consumer inflation data, the economic calendar is full of difficulties next week. The Philadelphia Fed’s retail sales, industrial production and manufacturing survey as well as the Empire State manufacturing survey are released on Thursday. The global S&P manufacturing and services PMI is released on Friday. Next week calendar Monday Earnings: Oracle , Coupa Software, Mesa Air 2:00 p.m. Federal Budget Tuesday Federal Reserve begins two-day meeting 6:00 a.m. NFIB Small Business Survey 8: 30 a.m. Consumer Price Index Wednesday Earnings: Lennar, Trip.com 8:30 a.m. Import Prices 2:00 p.m. Fed Statements and Forecasts 2:30 p.m. Fed Chairman Jerome Powell Recaps Thursday Earnings : Adobe, Jabil 8:30 a.m. Initial jobless claims 8:30 a.m. Retail sales 8:30 a.m. Empire State Manufacturing 8:30 a.m. Philadelphia Fed manufacturing 9:15 a.m. Industrial production 10 :00 am in Korea g business inventories 4:00 p.m. TIC data Friday Earnings: Accenture, Darden Restaurants 8:30 a.m. Business Leadership Survey 9:45 a.m. S&P Global Manufacturing PMI 9:45 a.m. Morning S&P Global Services PMI