MesaZona > Table of Contents : Here's The Menu. Enjoy: FED IN A TRICKY SITUATION : Both Headline and Core Prices Indexes rose 0.4%, bringing the annual measures to 3.2% and 3.8%, respectively

Mohamed A. El-Erian |

Both headline and core prices rose 0.4%, bringing the annual measures to 3.2% and 3.8%, respectively.

US CPI inflation came in hotter than expected for the third straight month ... and the result is continued price pressure on consumers, which hits the poor hardest, and a sharp market reaction. Both headline and core prices rose 0.4%, bringing the annual measures to 3.2% and 3.8%, respectively.

Services led the way, but they were far from the only drivers of the hotter inflation. Yields immediately surged higher, with the 2-year currently trading above 4.92% and the 10-year nearing 4.50%.

The market is now pricing less than two Federal Reserve cuts this year as it takes another step in the "later and fewer" direction for the excessively dependent Fed. The major stock futures indices are down over 1%, and the dollar is stronger.

All this puts the Fed in quite a tricky position -- one in which it should take a holistic view of what's ahead for the economy as a whole. But will it? #economy #inflation #markets #FederalReserve

6:11 AM · Apr 10, 2024