CPI Argues for More Rate Hikes

January 2023 headline CPI came in at 6.41% versus 6.45% for December 2022. It increased 0.8% month-over-month, though this was reduced to 0.5% after the usual government massaging (aka seasonal adjustment.)

Core CPI also dropped – from 5.71% in December to 5.58% in January. Despite all that massaging, some of the recent gains in energy prices made it into January’s data.But, a win’s a win, right? In this case, the data wasn’t far from most expectations, so the market is holding up so far.

Purely by coincidence (not) it seems that VIX was clobbered by 7% – over 14% from Friday’s highs.If you look closely, though, you’ll notice that VIX merely backtested the channel from which it broke out last Thursday – meaning that the latest rally might finally be over.