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Five Things You Need to Know to Start Your Day

Fed QE may be reducing liquidity and fueling volatility

Inflation shock, Musk sells some shares, and Evergrande dodges default again. 

Yesterday’s surprise inflation number continues to dominate investor focus this morning. The data sent Treasuries and growth stocks tumbling, while helping push the dollar close to one-year highs. There was even a moment where Bitcoin seemed to act like an inflation hedge, but that soon passed with the token plunging late in the session. With economists predicting even bigger inflation jumps in the coming months, pressure for the Federal Reserve to act will only increase. Earlier this month Fed Chair Jerome Powell said policy makers will be patient on hikes, but won’t hesitate to act if warranted by the inflation trajectory. President Joe Biden, who is under increasing political pressure over rising prices, said that reversing the trend is a “top priority.”