A very, very, very, very slightly softer than expected Core CPI print combined with broadly less-hawkish FedSpeak sparked the biggest rally in stocks since April 2020 and the biggest collapse in TSY yields since March 2020.
The massive rally in stocks and bonds sent the 60/40 portfolio up 3.4% today. Since 1988, there have been only seven other sessions when the portfolio jumped more than 3%, all happening during the 2020 and 2008 recessions.
Keep in mind, though, that the forward returns after these big rallies have been poor.
So CPI stoked the market's rally then Dallas Fed's Lorie Logan pured gasoline on that fire by signaling The Fed would soon slow its pace of tightening...
“This morning's CPI data were a welcome relief, but there is still a long way to go,”
“While I believe it may soon be appropriate to slow the pace of rate increases so we can better assess how financial and economic conditions are evolving, I also believe a slower pace should not be taken to represent easier policy.”
To read more visit Zero Hedge.
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