The hope in May versus the reality of June
In May, we had an inflation reading called Core PCE (personal consumptions expenditure) that indicated a potential peak in inflation. Last week, another inflation reading on the headline CPI (consumer price index) was much worse than expected. Markets popped on the first, then melted on the second.
In the world of finance, the REACTION to the data can sometimes be more important than the DATA REPORT itself. At 8.6%, last week's headline CPI was only a bit higher than the 8.3% from the month before. However, the reaction was significantly negative as rates rose, bonds and stocks fell.
Here are a few slides that tell the tale.
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Robert Lloyd, CFA®
Chief Investment Officer
Lloyds Intrepid Wealth Management
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