Price Pain In CPI, But No 'Sticker Shock" To Stocks

The results are in, and as widely expected, US inflation wasn’t pretty in April. The headline Consumer Price Index (CPI) rose 3.8% y/y, up from March’s 3.3% and the fastest rate in three years.[i] Fuel prices drove the jump, and Americans took an inflation-adjusted pay cut as real wages fell. Ouch and ouch. But despite this objectively bad news, for markets, nothing really changed. Data are merely confirming what stocks already anticipated, priced and seemingly got over as they fell in March and rallied in April. Always think like markets, and don’t get hung up on short-term data wobbles. Read Full Article »