Do NOT Be Data Dependent

The Fed is always mentioning the words "data dependent" on how they are going to react to what, when it happens, whether it is CPI, interest rates, bank failures, housing, whatever.

As a trader, you can not rely on one specific piece of data, and a lot depends on the data you do choose evaluate the economic future.

Blerina Uruci of T. Rowe Price made a great point about CPI data today that came out while the SVB and banking collapse situation is still taking place.

“All the information we are getting now are data before SVB and the bank failures,’’ she said. “But going ahead, we are expecting tightening in credit conditions which will affect the economy and inflation.”

CPI is still moving up, but it looked like the market priced in nearly a percentage point of rate cuts over the next 10 months.

Friday is when things start to really shake out, when earnings season starts.