Morgan Stanley's macro strategy team is cautioning investors that Tuesday's Consumer Price Index report could be hotter than expected. The bank describes the anticipated April inflation data as 'spicier,' forecasting a monthly core CPI increase above the 0.3% consensus.
Beyond Tuesday's CPI release, markets are also bracing for producer price data and the Fed's preferred Personal Consumption Expenditures index. If core CPI comes in at 0.4% or higher, it could push rate cut expectations into late 2026 or beyond.
The crypto connection remains relevant: following a strong jobs report in January 2025, Bitcoin dropped below $93,000 as inflation fears grew. Conversely, a soft CPI in August 2025 saw Bitcoin climb 1% while Ether surged 8%, indicating Ether's heightened sensitivity to macro sentiment.
Key components to watch include shelter costs, which remain stubbornly high. For crypto traders, the minutes immediately after the 8:30 AM ET release often produce the sharpest moves due to thinning liquidity and leveraged position flushes. A consistently hot set of readings across CPI, PPI, and PCE would be significantly more bearish for risk assets than any single elevated print.