CPI Inflation at 7.5%. What else to Expect?

[RedSun]

Wonder why so many traders want to fight Fed and take chances?

End of pandemic. Economy opening up. Supply chain problem. Huge trade imbalance. Extremely high energy prices. All point to inflation that has run away from any control. Fed waited too long and its "transitory" theorem is totally wrong. Inflation has get entrenches and will not come down.

Fed going to have a 50 basis point rate increase? Even an 100 basis point rate increase won't bring down oil price.

Trade accordingly.....

 

[Rickshaw Man]

FOMC waiting for raging inflation, then they may do something....Like a 0.25% bump up.

 

[RedSun]

But what can a 25 bps do to the market? People giving up mortgage applications because of the rate increase? Or we stop our trip to grocery store because gas is at $4.00?

 

[RedSun]

10 year Treasury yield just breached 2%.

 

[Evermore2017]

and the markets liked 7.5% recovered from lows premarket, crazy

 

[zdreg]

10 year Treasury yield just breached 2%.

embedded 7.5% +/- 2% in the short run, next 6 months.

 

[zdreg]

and the markets liked 7.5% recovered from lows premarket, crazy

they were grateful it was not a surprise of more than 7.5%. It is all nonsense. Do you believe government figures? I have a bridge to sell you cheap.

 

[RedSun]

Both Bill Ackman and Cathie Wood are buying dips. So Bill had to unwind his swaptions (interest rate hedge) to buy NFLX dip. That trade would have made him a lot of $$$. And yet NFLX is down 1.65%.

Wonder what my dear Cathie had to sell? Sell Google, MSFT and AMZN?

 

[murray t turtle]

But what can a 25 bps do to the market? People giving up mortgage applications because of the rate increase? Or we stop our trip to grocery store because gas is at $4.00?

%%
I did a study on 20+ years of fed rate hikes; trend following with some inverse ETF trades / still look good.
Actually i live in an area of cheap gas. I have seen more of those motor scooters/180+ 220 MPH/LOL. And sure i do trend study; but my neighbor + IBKR founder rides a horse ........................................................................................................................[Gas, local = $2.95 cash to $3.19] I drive a 4 cylinder myself+ scale in gasoline buys myself;not a big deal, but fun]
QQQ /TQQQ tends to outperform, long term, SPY+SPY related derivatives , but not past 12 month or so

 

[ET180]

So market rallies yesterday thinking that CPI number could come out to be less than expected...CPI prints hot, market falls, then rallies anyway. Makes no sense. Agree, don't fight the Fed.