Why The Market Ignored Hot Inflation
It's more dovish than you think...
Why were the hot CPI and PPI dismissed so quickly?
I mean…
Hot CPI, hot PPI, and what we got?!
Dollar weakness and equities strength.
What’s going on?
Yes!
Listen to Powell below:
Core PCE is all that matters for them right now.
And guess what?
The CPI and PPI components that feed into core PCE prices all came soft.
Which led to downward revisions for the upcoming PCE reading:
PCE Core PCE could get as low as 2.5% yearly reading.
Dovish!
And when the context gets dovish, markets get bullish (and bearish USD).
And so there we are:
Long the S&P500.
From our public Telegram channel on Friday:
In simple…
That’s why inflation is not as much of an issue as the headlines show.
Sometimes you have to read between the lines (literally)
With that said…
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