Bassanese Bites: Consumer price index (CPI) watch – September 12 2022
Week in review
After several weeks of losses, global stocks bounced back last week on little new fundamental news, likely reflecting end-of-month rebalancing and profit taking from short sellers.
If there was one possible fundamental reason, it was a couple of Fed speakers (Brainard and Mester) acknowledging that the aggressive pace of policy tightening will eventually ease as growth slows and inflation declines. Wall Street leapt on the glimmer of good news. That said, most of their other comments remained hawkish, suggesting rates needed to rise to restrictive levels and stay there for some time. Fed chair Powell also chimed in with another barrage of aggressive comments. Indeed, US 2-year bond yields actually rose last week, reaching new high for the year at 3.56%.
