Home › Market News › Let’s Talk Inflation
The U.S. Bureau of Labor Statistics (BLS) recently published the monthly Consumer Price Index (CPI) summary, which measures the changes in price for goods and services purchased by U.S. consumers. Coming in hot with a month-over-month change of +0.8% and a year-over-year change of +4.2%, it would appear that the inflation fears we’ve heard about could be valid. The BLS stated in its report that last month (April 2021) had “ the largest 12-month increase since a 4.9-percent increase for the period ending September 2008.”
This week, the Topstep coaches are here to give you a quick breakdown of what’s happening in the markets with all of this new information coming out.
They say that the early bird gets the worm, and we believe it! On a day where volatility flattened out after the morning economic reports were released (Tuesday, May 11), one particular funded trader stepped up to the plate to take a few swings while the market was hot.
Enter Jon Fason, a veteran Topstep trader who has been putting up some big numbers trading the E-Mini S&P 500 Futures (ES). On this day, taking advantage of the early volatility, Jon shut it down by 10:30 AM CT and pocked almost $11,600. On top of that, we found out a little later that he requested a withdrawal from his Funded Account. We think Jon is going to have a pretty good summer!
There are many moving parts to the U.S. economy, and it’s definitely a challenge trying to keep up with everything that’s moving the markets. The Fed has been printing money like crazy, and the economy is still fat on Covid stimulus. So, as traders, what does that mean for us?
Economic releases, like the monthly CPI report, are important because they help us gauge the future of inflation and what moves the Fed will make to combat it. Right now, we see a steep increase in the cost of food, fuel, building materials, and even automobiles. Some of these price spikes are directly related to holdover Covid issues like supply chain disruptions and decreases in demand. Others might be considered leading indicators of the direction of the economy.
In any event, wages are going up, along with the costs of goods and services, and the recent employment numbers weren’t the most optimistic we’ve seen. With the summer months upon us, we can expect to see this trend continue, at least for the time being. How far things will go before the Fed steps in with a rate hike is anybody’s guess, so headline risk is back on!
Trade Well!
