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The Fed Will Cut Rates Next Week. Thursday’s Consumer Inflation Reading Might Suggest It Shouldn’t.

1. U.S. stagflation risk is rising, reminiscent of the early 1980s. 2. Softer job readings are expected, resetting labor market assessments. 3. CPI inflation could show core price pressures exceeding 3.1%, above Fed's target. 4. Mixed growth prospects complicate Federal Reserve's rate decision ahead of September meeting. 5. Economic indicators hint at potential bear market conditions amidst inflation concerns.

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FAQ

Why Bearish?

The article suggests emerging stagflation and inflation concerns, which historically correlate with market downturns. Similar conditions in the 2007 financial crisis led to significant market declines.

How important is it?

Concerns around stagflation and fluctuating inflation directly affect investor confidence in SPY, indicating a solid likelihood of impact.

Why Short Term?

Upcoming economic data are likely to generate immediate market reactions, affecting SPY in the near term. Similar reports in the past have quickly influenced stock market performance.

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