Battle of the inflation bulge

THU, JUN 17, 2021

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF THU, JUN 17, 2021 • 12:46 ET

DJIA		33702.70
		-0.97%	-330.97

S&P 500		4207.84
		-0.38%	-15.86

NASDAQ		14103.17
		+0.45%	+63.49

EDITOR'S NOTE

Consider the following and then tell me what you think is going on.

Paul Tudor Jones, on Monday: "If they say, 'we're on path, things are good' then I would just go all in on the inflation trades. I'd probably buy commodities, buy crypto, buy gold."

Trading as of 12 p.m. Thursday: Gold -5%, Silver -7%, Copper -4%, Palladium -10%, Bitcoin -0.5%.

Conclusion: Fed was hawkish.

David Tepper, to Scott Wapner this morning: "I think the stock market is still fine for now," despite the hawkish dots yesterday.

Trading as of 12 p.m. Thursday: Dow -1%, Russell -2%, Vix +4%, Nasdaq positive. And the yield on the 10-year, which spiked to 1.54% after the meeting yesterday, is all the way back down to 1.48%.

Conclusion: Fed was maybe too hawkish, but Tepper says it will be fine.

Conclusion: If the Fed was possibly too hawkish by barely lifting its rate-hike forecasts, then the market thinks deflation is still a bigger threat than inflation.

Conclusion: Then the Fed should have done nothing, which would have goosed the inflation trades, thus reinforcing the price-pressure-problems and all the NGDP vs. potential GDP problems Michael Darda has been warning about.

Conclusion: Or maybe the Fed got it just about right?

Conclusion: My head hurts.

See you at 1 p.m!

Kelly

Kelly Evans
Twitter: @KellyCNBC

Instagram: @realkellyevans

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