Last June, WTI tested the top of a huge channel dating back to the year 1999. 
At the time, CPI was 5.4% and the 10Y was around 1.5%. A pullback here would have allowed inflation to top out and for rates to stabilize. Indeed, WTI pulled back almost 20%, whereupon the stock market noticed and began one of those “terrifying” 3.5% declines.
By the time SPX reached its 50-DMA, WTI was gearing up for another test of the channel top (the white arrow below.) 
Many observers, including yours truly, expected the folks running this casino to take heed of the bond market’s warning and allow oil and gas prices to decline.But, on September 20, SPX did something it hadn’t done in six months. It plunged below its 50-DMA (the white arrow.)
This was clearly an emergency calling for drastic action. The end of the quarter was coming up, and after that, the end of the year. A decline to the bottom of the red channel, where the SMA200 patiently waited, would mean a mere 10% gain for the year.
They got greedy. Or stupid. Or both. They crashed VIX to new lows…
…had USDJPY break out of a 5-year falling channel…
…and, just to be absolutely certain of new highs in the stock market, made sure that WTI broke out for good.
SPX responded, of course, soaring to a 2021 gain of 26.9% and closing out the year at all-time highs.
The Fed still had a chance to get things under control. Sure, CPI was now 7%. But, the 10Y was still well below 2%. All they had to do was get oil and gas prices to stabilize.They might have pulled it off if not for those pesky Russians.
When WTI spiked up above all resistance, the game was over. It was time for the Fed to own up to their past misdeeds (not mistakes) and admit that the laws of economics were still intact and required that they start thinking about thinking about raising rates.
Never mind that the market had already done it for them. Today, we should learn what they’ve already told us: very cautiously, in a data-dependent manner, yada, yada, yada… The futures are up 1.5% at the opening bell just in case investors aren’t too happy with what they hear.
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