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Tuesday, November 29, 2022

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‘Cool’ CPI Print Sparks Massive Dovish Repricing In Rate Expectations, Bonds & Stocks Soar

The cooler than expected CPI print sparked the somewhat expected chaos in markets as Fed rate trajectory expectations puked dovishly. Fed terminal rate has plunged back below 5.00% and subsequent rate-cut expectations are soaring…

December has now priced out any chance of a 75bps hike (50bps locked in)…

This fits the narrative…

Stocks immediately exploded higher. Nasdaq is up over 4%…

Bond yields puked (10Y back below 4.00%)…

And the dollar plunged…

Which helped send Gold futures surging up to $1740 – its highest in 2 months…

Some are arguing this is the start of The Fed ‘pivot’…

However, we are reminded of Powell’s press conference reversal and wonder how long before The Fed jawbones this financial condition easing impulse away?

This post was originally published on this site

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