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Inflation On Collision Course With Bank Drama As Traders Brace
Just as the second-largest bank failure in US history easily overshadowed nonfarm payrolls last week, so too will the specter of systemic risk and contagion from the SVB implosion eclipse a fresh read on US inflation in the week ahead.
That's not to say CPI data due Tuesday won't be meaningful. Indeed, it could make a bad situation worse in terms of sentiment if it underscores the idea that the gap between r-star and r-double-star+ is even wider than we thought.
Put differently, the SVB collap
A credit event is the ace of spades here, the Trump card. You can bin the other indicators for now.
I’m sitting here wondering if we’ve gone from out of control inflation to:
a) out of control deflation, or
b) hyperinflation
All in the course of a single weekend.