One reader with a Wikipedia page was upset with me on Tuesday when I characterized the January US CPI report as “horrendous.”

That’s a real shame. I aim to please, after all. Especially in the context of would-be market mavens who’ve convinced themselves that a career spent “analyzing” lines and squinting at squiggles is something to be proud of. Can you sense the sarcasm? I hope so.

You’ll have to forgive me, although I won’t care if you don’t: Tuesday was the second time in 48 hours that I’ve been subjected to laughably misplaced condescension by such a person. I don’t do well with condescension, implicit or otherwise, online or off.

With that out of the way, the CPI report was horrendous. (Sorry, Wikipedia guy.) A MoM supercore services print of between 0.7% and 0.8% is disconcerting. Fed officials will surely say as much in the days and weeks ahead. And rates said as much on Tuesday, when a sharp selloff at the front-end bear flattened the curve.

See that chart? It’s trying to tell you something. This is third time in eight sessions that a hot read on the US economy roiled rates. The inflation update was bad news. Maybe you don’t like “horrendous.” Fine. Go find a thesaurus and pick a synonym.

Of course, it’s easy to understand why sundry “professionals” (with scare quotes) and professionals (without the scare quotes) alike might be aggrieved by the suggestion that inflation’s going “wrong-way” again. After all, everybody and their brother’s crowded into long duration tech stocks and particularly the “Magnificent 7” on the assumption that chatbots and “draw me a bear with a Santa hat” applications are destined to bring about a disinflationary productivity boom. So, when an adverse development like a hot CPI report comes along and delivers an open-handed slap to that consensus, it’s… well, it’s annoying. (“What did the five fingers say to the face?”)

But what can you do? The data’s the data, and it plainly kneecapped the case for imminent Fed cuts. It also suggests less aggregate easing in 2024.

One of the key narratives over the first six or so weeks of the new year centered around the juxtaposition between solid equity performance and less aggressive rate-cut pricing. The question was (and still is) this: How many more cuts can get priced out versus the local extremes before stocks notice? Now we know the answer. Or at least we have a hint.

Implied easing for the full year slipped below 100bps in the wake of the CPI report, which is to say 75bps off the extremes and less than one quarter-point cut from being aligned with the December dot plot.

Guess what? They (the Fed) shouldn’t be cutting right now anyway. Core inflation’s double target for God’s sake, which brings me quickly full circle. Maybe Wikipedia guy was right: Maybe a hot inflation report wasn’t “horrendous.” Maybe it was the best possible news for markets that were overzealous and in desperate need of a come-to-Jesus moment.

(Don’t say I didn’t make you laugh today.)