That seems to be the investor conclusion from Wednesday's U.S. CPI print. Somehow, the same data is being used to justify a weaker dollar, higher yields and stronger stocks.
I'd have sympathy with those who argue that unchanged core inflation at 1.8% is still firmly in Goldilocks territory for equities -- but then why are yields higher?
Alternatively, if you want to focus on the fact that the numbers beat estimates across the board to excuse Treasury selling, then in what economics book is the combination of rising inflation, higher real yields and poor retail sales good for equities?
The weird thing is that, even though I knew investors were going to ignore the data and do what they wanted, I'm still confused by the reaction. Credit markets aren't happy yet and that's another red flag. Expect plenty of asset volatility the rest of the week
Jr Trader Alexander Kumanov
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