Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Markets Have Bought The Fed’s “Transitory” Narrative Hook, Line, & Sinker

Courtesy of ZeroHedge View original post here.

Authored by Jesse Felder via TheFelderReport.com,

April’s inflation figures came in hotter than expected and [today's hotter than expected CPI] only adds to that trend. As a result, you might think that markets may begin to price in an inflationary consensus.

You would be wrong.

As Nordea’s Mikael Sarwe tweeted last week:

For those unaware, core inflation is double the figure historically associated with the current level of interest rates. Essentially, the bond market is betting inflation pressures will soon recede as the Fed would like us to believe.

Similarly, Michael Ashton tweeted:

In addition, GMO noted last week that the stock market has also failed to reflect an inflationary consensus. In fact, the segment of the stock market most effective at protecting against inflation, energy and metals, trades at the deepest discount to the broader market in history.

In other words, the stock market is still pricing in disinflation. Confirming this view is the fact that, in contrast to the record discount in valuations of equity inflation protection, long-duration equities are the most overvalued ever, as noted by Richard Bernstein Advisors.

So markets of all kinds are taking the Fed at their word and buying the “transitory” narrative hook, line and sinker. This sets up a potential repricing event should inflation eventually prove more sustainable than the markets have priced in.

*  *  *

This post is based on an excerpt of a recent report featured on The Felder Report PREMIUM.


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!