Worried About Inflation? Bonds and Gold Don't Care
What matters to markets is what Jerome Powell does, and what matters to the Fed is progress in fighting the pandemic.
Jerome Powell and the pandemic are the missing links in this market disconnect.
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Back in the city after a week in which I paid as little heed to the markets as I could, what exactly have I missed? The most startling item of economic news (a much higher U.S. inflation reading than anyone had expected) and the most startling market event (a sudden 10.2% fall for gold) tended to counteract each other. Isn’t gold supposed to benefit from higher inflation? Meanwhile, the U.S. stock market remains agonizingly close to setting an all-time high, but comically unable to get there, as yet.