CPI Will Show Whether Stocks or Bonds Got It Right
- CPI’s going to be a test of who’s got it right, says Art Hogan
- But market wants to have its cake and eat it too, says Suzuki
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For the first time in a long time, stock and bond markets are flashing divergent signals on the economy and future Federal Reserve policy. Tuesday’s inflation report will go a long way in determining which one is right.
Bond markets have been cautious. Yields on two-year Treasuries have soared by more than 30 basis points over the past two weeks as traders grow wary of the Fed’s hawkish messaging ahead of the latest reading on consumer prices. Stocks have been less worried. Amid the re-rating in the debt market, the S&P 500 has climbed almost 1.5% over that span.