The cooler than expected CPI print sparked the somewhat expected chaos in markets as Fed rate trajectory expectations puked dovishly. Fed terminal rate has plunged back below 5.00% and subsequent rate-cut expectations are soaring…
December has now priced out any chance of a 75bps hike (50bps locked in)…
This fits the narrative…
The October inflation report is likely to keep the Fed on track to approve a 50-basis-point interest-rate increase next month
Officials had already signaled they wanted to slow the pace of rises and were somewhat insensitive to near-term inflation datahttps://t.co/jVTJvMkjg3
— Nick Timiraos (@NickTimiraos) November 10, 2022
Stocks immediately exploded higher. Nasdaq is up over 4%…
Bond yields puked (10Y back below 4.00%)…
And the dollar plunged…
Which helped send Gold futures surging up to $1740 – its highest in 2 months…
Some are arguing this is the start of The Fed ‘pivot’…
⚠️ This is the start of the Fed pivot. The breadth of US CPI is down sharply and moving back to a level that isn’t showing ‘scary’ inflation. This is what matters for the Fed. One data point doesn’t make a trend… but chart below shows we’re moving in the right direction $USD pic.twitter.com/cRlc0vki7t
— Viraj Patel (@VPatelFX) November 10, 2022
However, we are reminded of Powell’s press conference reversal and wonder how long before The Fed jawbones this financial condition easing impulse away?
Tyler Durden
Thu, 11/10/2022 – 09:01
