CPI Preview: Why This Inflation Report Could Rock Markets This Summer

Carlos Garcia | May 12, 2025 |

CPI Preview: Why This Inflation Report Could Rock Markets This Summer

Summary

All eyes on Tuesday’s Consumer Price Index (CPI) release. This isn’t just another inflation print. It’s a report that could reshape expectations around interest rates, market direction, and political pressure as we move deeper into Q2.

Market Recap

  • TESLA INC ( TSLA ) : +7.01%
  • AMAZON INC ( AMZN ) : +7.16%
  • HIMS & HERS HEALTH ( HIMS ) : +7.67%
  • APPLE INC ( AAPL ) : +5%
  • GOLD ETF ( GLD ): -2.8%
  • VOLATILITY INDEX ( VIX ): -12.69%

Market Movers

  • 📈 US CPI INFLATION DATA 8:30AM ET: May 13, 2025

📚 Deep Dive 📚

CPI: The Print That Could Shake the Summer

The market is starting a pivotal week — all eyes on Tuesday’s Consumer Price Index (CPI) release. This isn’t just another inflation print. It’s a report that could reshape expectations around interest rates, market direction, and political pressure as we move deeper into Q2.

Why This CPI Matters So Much

Inflation has been cooling, but not fast enough — especially in the areas the Fed cares about most:

  • Core services remain sticky
  • Shelter costs are still elevated
  • Month-over-month inflation has struggled to stay consistently below 0.2%

At the same time, the economy isn’t showing weakness:

  • GDP remains solid
  • Job market still strong
  • Consumer spending isn’t cracking

Put simply: if this CPI comes in hot — even modestly above 0.2% m/m — the Fed will be hard-pressed to justify a June rate cut. At this point, the market’s optimism is hanging on a very slim thread of disinflation.

No Cut Without Weakness

“No disinflation = No cut.”

The Fed has made it clear: they’re in wait-and-see mode. Powell doesn’t want to stimulate into strength — not after getting burned by premature optimism in past cycles. And with GDP cruising and unemployment sub-4%, they’re running out of reasons to ease up. And let's be real - they are always late to the party.

So Tuesday’s CPI number?

That’s the scoreboard.

  • Under 0.2%: the bulls may breathe a sigh of relief.
  • 0.3% or higher: the June cut probability dies, and September becomes the next possible pivot.

The Politics Are Heating Up

President Trump has openly criticized Fed Chair Jerome Powell, which only adds to the tension. While it’s not uncommon for presidents to pressure the Fed during an election cycle, this kind of rhetoric puts Powell in a tough spot.

Powell’s currency is credibility — not partisanship.

Calling him out publicly while inflation is still above target does more harm than good. It creates a narrative that the Fed is “holding the economy back,” when in reality, Powell is leading a 12-member committee (the FOMC) that operates independently — by design.

Meanwhile, Trump’s messaging has also leaned heavy on Powell, seemingly forgetting that the Fed chair doesn’t unilaterally control rates. His commentary may resonate with his base, but for market pros, it only muddies the understanding of how the central bank actually works.

Bottom Line

This CPI report isn’t just a print — it’s a pressure point.

  • For the Fed: it’s a credibility test.
  • For the White House: it’s a political landmine.
  • For traders: it’s a market-defining moment heading into summer.

"Whether you trade futures, equities, or simply monitor macro trends — this Tuesday matters. We’ll be ready either way. Eyes open. Risk managed. See you on the trading floor!" - Carlos G.

Checkout Today's Gains for the Team:

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Best Regards,

Carlos Garcia