JPMorgan's Feroli on US CPI - FJElite

Given the de-risking last week, elevated vol regime, and heightened Equity sensitive to bond yields, this print takes on increased importance as well as more volatile outcomes, based on options pricing. Headline inflation is unsurprisingly expected to rise driven by (i) energy prices; (ii) food prices; and (iii) core goods, including used vehicles and apparel. Core services are expected to print in line for 26Q1 averages. We view this print as good news is good news' and bad news is bad news'. Keep an eye on Core and Supercore as both metrics have been moving higher despite the Fed flagging that inflation emanating from SoH being transitory. Overall, this print has elevated tail risk, which is why the tail scenarios reflect a higher magnitude of move with a hawkish print generating a larger move than a dovish print.