Powell’s Soft-Landing Dream In Danger as Traders Hedge Inflation
- Stock and bonds tumble in concert after the hot CPI report
- Gains in asset prices pose a problem for the Fed: Ramsey
Jerome Powell
Photographer: Al Drago/BloombergThis article is for subscribers only.
Signs that inflation has yet to release its grip on markets have simmered for weeks. Now they’re boiling over after Wednesday’s hotter-than-forecast consumer price index sent stocks and bonds reeling.
With gold, oil and cryptocurrency rallying of late amid fresh demand for inflation hedges, the March CPI report unleashed a rout across Wall Street. Yields on 10-year Treasuries topped 4.5% for the first time since November while the S&P 500 closed around 1% lower. Energy companies were the best-performing names, a reminder of the post-pandemic playbook when inflation trading was ascendant. Brent crude climbed back above $90 as geopolitical tensions heightened.