Is the Inflation Bubble About to Pop?

With the last few sets of Inflation data coming in over the last few months, it does perhaps look like the worst of the inflation nightmare is behind us … the peak looks to have past. In Fact the last round of data came in at expectation.

But make no mistake … just because the peaks looks to have past, doesn’t mean that the economic picture has suddenly become nice and rosy. Let’s just rip the band-aid off … things aren’t good. The last year-on-year CPI figure (Dec 14’22) came in at +7.1%, up from +6.8% 12 months earlier. That’s still 14.4% in 2 years. Hell, the Month-on-Month number was still +0.1% … inflation is going up … still. [1]

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Can Rising Interest Rates Stop Inflation?

When it comes to the markets, things have been a bit all over the place … so much so trying to make sense of things is frankly maddening. But its safe to say that the topics that have been dominating have been Inflation and the federal reserve … and its commitment to fighting inflation.

But investors and traders themselves are doing their bit … seemingly on a day to day basis. You don’t have to look through too much history (re: the S&P 500 index) just in the last few months to see whiplashing movements in both directions, where each downward movement is followed by some article about ‘Worries of inflation pushes markets lower …’, each upward movement followed by trailing headlines, ‘Worries of inflation easing …’

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