'Peak inflation' is dead. Here's what that means for stocks

It only took a 0.1% advance in the rate of consumer-price inflation last month to send markets into their worst tailspin in two years.

But what might seem like a relatively small uptick — coupled with the fact that the headline number actually declined on an annualized basis — belies a far more significant shift in markets. “I think some investors were lulled into the sense that inflation might be coming down fast because of the quick drop in energy prices that played a role in that thinking,” said Mohannad Aama, a portfolio manager at Beam Capital.See: U.S. inflation roars back in August, CPI shows, despite falling gas prices

What’s more, traders are now pricing in nearly 30% odds that the Fed will need to hike by a full percentage point when it meets next week, something the investment bank Nomura, McElligott’s employer, is already expecting.As McElligott explains, higher interest rates are bad news for stocks since they will likely hurt consumption and capital expenditures by companies, ultimately manifesting in the form of slower economic growth and lower corporate earnings.

“The impact of rate hikes takes time to show up in economic data. And so I fear that any central bank that hikes rates in 75 basis point increments is turning monetary policy into an even more blunt instrument, and runs the risk of overdoing it,” Hooper said in emailed comments.

gaslighting

1) core PCE (the Fed's preferred measure of inflation) at levels below Nov 21 when the Fed didn't even announce (let alone begin) tightening 2) 2 MoM declines in CPI in a row 3) AHE at 3.6% annualized within the Fed's LT goal of 3-4% And you say 'peak inflation is dead'?

Blue packaged meat is very nice.

You know it went up right, up is the opposite of what you posted. You might want to stop letting your drunk uncle who didn't graduate high school from posting on your account. This account has been a dumpster fire for a while.

Mhmmm, sure.

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