Goldman Sachs: CPI is broadly in line with expectations, and the market does not need to focus on this.

Goldman Sachs economist Alexandra Wilson-Elizondo said: "Today’s CPI came largely in line with expectations, a result that on the surface is what investors wanted, but it has significantly raised uncertainty around next week’s interest rate decision. The challenge is that the data does not fully reflect some of the recent inflation pressures that have emerged, and there is almost no evidence that inflation is returning to target levels in the short term. This report’s survey period predates the latest round of energy price increases, as well as the spread in commodity gains from energy to sectors like metals and agriculture. Today’s inflation data does not eliminate the possibility of stronger price pressures emerging in the future. All in all, today’s in-line data will keep the Federal Reserve’s option to raise interest rates open, without forcing it to act. So markets may now pay more attention to Waller’s communications, energy prices, labor market data, and upcoming developments rather than what was released today."