As we celebrate the coolest run of US core inflation in more than two years, we should take a moment to mourn the three-dozen people who burned up in Maui this week.

Parts of the island are “a wasteland,” as the AP put it, after a wildfire stoked by wayward winds from a hurricane destroyed a 300-year-old tourist hotspot. Entire communities were “obliterated,” and hundreds of structures were either destroyed or damaged.

Some locals were forced to swim out into the ocean to save their own lives. Audrey McAvoy, Jennifer Sinco Kelleher and Nick Perry described the scene. “Wide swaths of ground glowed red with embers as flames continued to chew through trees and buildings,” they wrote. “Gusty winds blew sparks over a black and orange patchwork of charred earth.”

Although fires aren’t uncommon in Hawaii, this one counts as the deadliest US blaze since 2018, when then president Donald Trump cited “forest nation” Finland in suggesting the US employ better raking techniques to help prevent wildfires. (Finland had no idea what he was talking about.)

It’s becoming harder and harder to persist in a “It can’t happen to me” mindset as it relates to climate disasters. As detailed in the latest monthly letter+, I finally abandoned my island retreat this month after seven years of seaside solitude. Although fear of climatic oblivion wasn’t the only reason, it was a contributing factor. Thankfully, I was able to leave by car. I wasn’t forced into the ocean by an oncoming wall of fire.

With apologies to anyone unconvinced by the science, things are absolutely getting worse for Earth. And in a hurry. As most readers are probably aware, July was very likely the hottest month in the history of human civilization.

“These records have dire consequences for both people and the planet exposed to ever more frequent and intense extreme events,” Samantha Burgess, deputy director at Copernicus, said this week.

“Even if this is only temporary, it shows the urgency for ambitious efforts to reduce global greenhouse gas emissions,” she added. Spoiler alert: It’s not “temporary.” I don’t have Sam’s expertise in these matters, but I can assure you it isn’t “transitory.”

But inflation was. Temporary and transitory, I mean. Not quite in the way most regular people define those words, and to be sure, the “transitory” crowd was wrong. But unlike the planet, inflation is a lot cooler than it’s been in a while (sans the UK).

Thursday’s US CPI report probably took a September Fed hike off the table. The November meeting is still ostensibly in play, but another couple of monthly inflation updates like the last two, and the Fed will almost surely call the job finished, especially if the labor market continues to soften.

Markets were a bit of a mess in the wake of the data. Thursday should’ve been a celebratory affair, and initially it was. But in keeping with recent choppiness, the price action turned somewhat convoluted.

The 30-year sale was just ok. You could call it lackluster, but certainly not “bad” under the circumstances. When considered with the decent 10-year refunding and the solid three-year sale earlier this week, I think it’s safe to say supply is being digested with relative alacrity. Fears of indigestion were overblown. Nevertheless, Treasurys traded heavy Thursday with losses led by the belly and intermediates. Futures volumes were robust.

“The undertone was one of ongoing bearishness even though the refunding auctions were generally well-received,” BMO’s Ian Lyngen and Ben Jeffery said. “We’re cautious against making too much out of the 1.4bps tail for the long-bond,” they added, noting that “of the prior nine 30-year refundings that were larger than the previous quarter, only one stopped-through.” The simple takeaway, they wrote, is that “the added DV01 required a more meaningful concession in the underwriting process.”

Equities ended unchanged on Wall Street, which felt frustrating and apt all at once.

The range compression over the course of the summer melt-up is well-documented. The figure above gives you a sense of the trajectory since last year’s lows for equities.

Notwithstanding more buy in for the soft landing narrative, and a growing body of macro evidence to support it, there’s been no real “all-clear” moment for stocks.

Discretionary positioning may be as extended as it’s going to get absent some unequivocal green light. As for systematics, the risk is asymmetric — they’ll be larger notional sellers in a downdraft than they will be buyers into a rally thanks to near maxed-out exposure.

And yet, there are a few potential flow catalysts+ for a melt-up too, and with the CPI event risk cleared, US equities have an excuse to make a run at records if they’re so inclined.

What else is there to say? Pray for Maui, I guess.