The U.S. October CPI will be released tomorrow night at 21:30 Beijing time.

First, let’s break down the question: Does the market want to see inflation cool, or the economy remain resilient?

My answer is clear: the market would rather see inflation cool.

The reason is simple: the key issue right now is “will the Fed hike rates again in December,” not “is the economy strong?” Last Friday’s nonfarm payrolls already proved the economy is resilient, with 165k jobs added and unemployment at 4.1%, but the result was that rate-hike bets climbed to around 77%. For risk assets, “resilience” is bearish, while “cooling” is the cure.

The market isn’t short of strong jobs data; it needs a reason for the Fed to pause. Only CPI can provide that reason.

【Who will move first? BTC first, Nasdaq second, gold the least responsive】

BTC: It has the greatest elasticity, and leverage amplifies the direction. On top of that, the crypto market has just experienced sharp volatility, and extreme funding rates can easily trigger a stampede.

Nasdaq: It is most directly priced against policy expectations. It plunged 5.5% just last Thursday, and sentiment is fragile; any “upside surprise” could trigger a second sell-off.

Gold: The least “responsive,” because its drivers are two-sided: higher rates are bearish for gold, while runaway inflation is bullish for it, and safe-haven buying will enter the market.

【Two reactions, two scenarios】

First, inflation comes in above expectations, with core monthly CPI at 0.3% or higher.
A December rate hike is virtually locked in, putting BTC and U.S. stocks under pressure, with the Nasdaq and tech stocks most sensitive. Gold will face short-term pressure from real rates, but if the market interprets this as “runaway inflation,” safe-haven buying could help it hold up or even rise against the trend.

Second, inflation comes in below expectations, with core monthly CPI falling to 0.2% or lower.
Rate-hike bets ease, risk appetite recovers, BTC has the greatest elasticity, and tech stocks follow with a rebound; gold also benefits from expectations of lower real rates. In this case, “interest rate expectations” become the dominant driver for gold.

【My trading plan】

Before the data release: Don’t guess the direction or add leverage; reduce positions to a level that lets you “sleep soundly.”

After the data release: Wait 15 to 30 minutes for the initial reaction to play out, and focus on two figures—monthly core CPI and the change in the probability of a December rate hike.

Then respond according to each scenario. Don’t trade against the trend or chase highs; manage “predictions” and “positions” separately.

This CPI release isn’t a choice between “inflation vs. the economy,” but a question of whether the Fed will pause.

Do you think the market wants cooling or resilience more? Share your prediction in the comments.

These are my personal views and do not constitute investment advice!

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