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Every Dove Has Its Day
Markets were absolutely enamored with Wednesday's inflation report out of the US.
Bonds were the bane of equities' existence for most of the last four or five weeks, a period during which the term premium widened to the highest in a decade and longer-end yields breached 5%, raising the specter that 10s might revisit cycle highs.
The heavier bonds traded, the more anxious richly-valued equities became. The drama crescendoed late last week in a distasteful bear flattener following a(nother) stro
Will not be surprised to see a cut in March. Seasonals are completely distorted now. I expect the big payrolls number to wash out to a more normal level. The inflation genie is not quite back in the bottle but it is close. If inflation is between 2-2.50% by the end of the first quarter, a 4% funds rate is 1% too high to keep the economy growing.
Ok. However, looking through some of the data- it looks like egg prices are “only” up 38% in the last year.