## 2024 US CPI Trends and Investment Opportunities: From Data to Decision-Making

### Why must investors pay attention to the timing of the US CPI release?

The timing of the US CPI release has a significant impact on global asset prices. It is not just a set of statistics but a barometer that directly influences Federal Reserve policy directions. Since US CPI is released before PCE data, markets often react strongly to this early indicator, potentially causing short-term fluctuations in stocks, Crypto, and other major asset classes.

**2024 US CPI Release Dates (Taiwan Time):**

| Date | Time |
|------|------|
| January 11 | 21:30 |
| February 13 | 21:30 |
| March 12 | 21:30 |
| April 10 | 20:30 |
| May 15 | 20:30 |
| June 12 | 20:30 |
| July 11 | 20:30 |
| August 14 | 20:30 |
| September 11 | 20:30 |
| October 10 | 20:30 |
| November 13 | 21:30 |
| December 11 | 21:30 |

The US CPI data release time is typically on the **first business day of each month or the closest business day**, with differences during daylight saving time and standard time. Notably, during standard time (usually November and December), the release time shifts earlier to 21:30 Taiwan time, while in other months it is at 20:30.

### Which of the three major inflation indicators should investors watch?

In US inflation monitoring, there are two main series indicators—CPI and PCE—each with multiple versions. For market participants, understanding the differences between these indicators is crucial.

**CPI vs Core CPI: Differences in Calculation Scope**

US CPI covers price changes for all goods and services but is more susceptible to fluctuations in food and energy prices. Core CPI filters out these two volatile components, providing a clearer view of underlying inflation trends. Core CPI excludes food and beverages (about 13–15%) and energy (about 6–8%), thus better reflecting true price pressures in other consumption areas.

**CPI vs PCE: Fundamental Calculation Method Differences**

CPI uses a Laspeyres (fixed-weight) method, while PCE employs a chain-weighted approach. PCE is more adaptable, capturing substitution effects as prices change. For example, when oil prices surge, consumers may shift to alternative energy sources, and PCE reflects this more accurately, smoothing out peaks and troughs.

**Year-over-Year vs Month-over-Month: Temporal Dimensions**

"Year-over-year" compares current data with the same period last year, removing seasonal effects and providing a more stable trend. "Month-over-month" measures sequential changes. For investment decisions, **the US CPI year-over-year and US PCE year-over-year are the two most critical indicators**. The former is released earliest and reacts most sensitively; the latter is a key basis for Fed policy decisions.

### 2024 US CPI Composition Overview

To forecast the full-year CPI trend, understanding its internal structure is essential. The main components and their approximate shares are:

- Housing (including rent): 30–40%
- Food and beverages: 13–15%
- Education and communication: 6–7%
- Medical and health insurance: 7–9%
- Energy: 6–8%
- Transportation services: 5–6%
- New vehicles: 3–5%
- Leisure and entertainment: 3–5%
- Used cars: 2–3%
- Clothing and apparel: 2–3%

Housing and food & beverages together account for over 45%, making them the primary drivers of CPI movements. Investors should focus on these two subcategories when analyzing CPI data.

### Three Major Variables Influencing US CPI in 2024

**First Variable: Political Factors**

In 2024, the US will hold a presidential election, with candidates from both parties facing internal disagreements. To secure votes, politicians tend to promise excessive policies and may externalize internal conflicts. This political trend often leads to increased geopolitical tensions and a rise in trade protectionism, ultimately pushing prices higher.

**Second Variable: Federal Reserve Rate Cut Pace**

According to CME Group data, the market predicts the highest probability of the Fed cutting rates by 6 basis points in 2024. This reflects a general market expectation that US CPI will trend downward throughout the year, though there may be a rebound in Q2.

**Third Variable: Global Supply Chain Conditions**

The Red Sea crisis that began at the end of 2023 highlights the impact of global logistics on US inflation. Ongoing threats from Houthi forces have caused shipping companies to avoid Red Sea routes, with Asia-Europe freight rates more than doubling since early December 2023. While the current impact is less severe than during the COVID-19 pandemic peak in late 2020 or the Suez Canal blockage in 2021, regional logistics disruptions will eventually be reflected in consumer prices.

### Historical Review: Four Cycles of US CPI

Since the 1990s, US CPI has experienced four distinct downward cycles:

1. **July 1990 – March 1991**: Savings and Loan crisis and Gulf War oil price shocks
2. **September 2000 – October 2001**: Dot-com bubble burst and 9/11 attacks
3. **January 2008 – June 2009**: Subprime mortgage crisis
4. **March 2020 onward**: COVID-19 pandemic caused rapid CPI decline, followed by massive Fed stimulus pushing CPI to a high in June 2022, then gradually decreasing

The 2020 case shows that global logistics significantly influence US inflation trends. When supply chains are smooth, CPI tends downward; when disrupted, CPI rises. This pattern remains valid in 2024.

### 2024 US CPI Forecast: Downward Trend with Mid-term Rebound

According to the latest IMF forecast, US GDP growth in 2024 will reach 2.1%, and global inflation will fall to 5.8%. The US economy remains resilient, making a significant decline in inflation unlikely.

Considering declining crude oil inventories supporting oil prices, political uncertainties surrounding the US election, and risks in Red Sea logistics, we believe: **US CPI will bottom out in Q1 2024, rebound in Q2, and decline again in H2**. This trajectory will pressure US stocks and influence the Fed’s final rate cut decisions.

### Practical Recommendations

When tracking the timing of US CPI releases, investors should focus on the year-over-year rate rather than the month-over-month rate. Market volatility often occurs within 2 to 3 business days after each monthly data release. Additionally, combining CPI data with subsequent PCE data can better anticipate Fed policy shifts. For Crypto investors, CPI data often determines short-term risk appetite directions; exercise caution during market fluctuations around monthly releases.