When “Bad News” Becomes “Good News”

While Tuesday’s Producer Price Index (PPI) for April came in hotter than expected (+0.5%), markets took the bad data in stride, perhaps because the year/year change on the headline index was still only 2.2% (2.4% for the “core,” i.e., ex-food and energy). Another reason for the lack of market volatility from the release may have […]

Fed’s Dilemma – Hotter Inflation & a Cooling Economy + Why Inflation is so Hateful

Inflation was the main concern of markets this week. On Tuesday (March 12th) Consumer Prices (CPI) came in slightly hot, but within market expectations. As a result, the financial markets took the report in stride and equities rallied. The problem was Thursday’s Producer Price Index (PPI), an index that is a leading indicator of future […]

Finally! The Fed Recognizes Inflation’s Retreat Financial Markets Celebrate

Despite the fact that markets were 90%+ certain that the Fed was done hiking, both the equity and fixed-income markets were surprised that the hawkishness, that had been so prevalent for the past 18 months, had completely disappeared. We were surprised, too! The dovish policy statement and Chair Powell’s demeanor complemented each other. We think […]