With an economy bumping along, stagnant in most respects, and inflation on the rise, it’s getting harder and harder to avoid the stagflation diagnosis. Let’s see what Ms. Yellen comes up with later this morning.
For those who missed it, PPI was up a blistering 0.6% last month — largely on the sharp rise in energy prices. Ironically, it is oil futures which are spiking higher this morning in order to mitigate the data’s effect on equities.
It didn’t start out that way. Moments before the PPI number was released, VIX did a 0.25 plunge — a shot across to bow, as it were, to remind everyone that it can and does drop to whatever extent necessary to keep stocks from falling.
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