US CPI - Easy Peasy forecast

Background for CPI:

- Fed is data-dependant
- Fed Dot plots imply two rate hikes in 2015
- 15 out of 17 FOMC members see first hike in 2015
-  2015 FOMC Inflation Forecast Unchanged,  2016 Forecast Higher

Market is expecting a slight reduction in Core CPI to 0.2% vs 0.3% prior; but in contrast to that, the expectation for the headline number is 0.5% vs 0.1% prior. So yes, the market is slightly bullish on this CPI, especially as the FOMC is still headed for a rate hike in 2015.

But what do the facts state?

1) Import prices were higher than expected

 2) PPI was higher than expected

3) Gasbuddy  shows higher Gas prices 

4) Prices component of PMI was higher than expected

So the core number might actually have some conservative expectations baked into it and we could actually beat expectations there. Headline is materially bullish in expectations, which will be tougher to beat.