Wall Street is "immune" to inflation, expected CPI higher than expected will not impact US stocks.

On September 10, Wall Street's trading desks expect that the U.S. Consumer Price Index (CPI) to be released this Thursday will show inflation data on the hotter side, but since employment data has become the core narrative of the market, they do not anticipate significant fluctuations in the stock market. Citigroup's head of U.S. equity trading strategy, Stuart Kaiser, stated that options traders are betting that the S&P 500 index will fluctuate both ways by about 0.7% after the CPI is released, lower than the actual average fluctuation of 0.9% on CPI release days in the past year, and also lower than the market's expected fluctuations for the next employment report on October 3. Kaiser even believes that this implied fluctuation range is still on the high side. All of this relates to how traders interpret the Fed's interest rate path. U.S. employment data has shown signs of weakness that threaten economic growth, hence the market expects that the Fed will lower the federal funds rate by 25 basis points at the conclusion of its meeting on September 17, and may continue to cut rates in the meetings in October and December. ( Jin10 ).