After waiting for a few months we finally get some directionally favorable inflation news. Markets are flying.
Inflation came at 7.7% year over year–below the 7.9% expectation. The core month over month change came at .3% versus versus .5% expected.
Equities are partying hard–up 2.7%. The 10 year treasury is at 3.95%–seems like we will see a decent rally today in preferreds and baby bonds today.
So we get 1 ‘vote’ for a reduced Fed Funds rate hike in December –but it is just one piece of data and much more is to be seen in the next 30 days leading up to the FOMC meeting.