At 6.81%, headline inflation is now the highest it has been since March 1982 (6.78%.) Originally driven by sharply rising oil and gas prices…
…it is now broad-based and anything but transitory, with medical commodities the only category below the Fed’s original 2% target.
Algos responded with the usual VIX smackdown which, not surprisingly, began one minute before the BLS release.
It remains to be seen, once the market opens, whether carbon-based investors will be so enthusiastic about the prospects of a quicker Fed taper.
For history buffs and those with fond memories of price discovery, note that the Mar 1982 CPI of 6.8% saw the 10Y yielding 14.2%, a far cry from today’s 1.5%. It’s a testament to just how broken the bond market is.
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