RBC: Even A Trace Of Hawkishness From The Fed And Markets Will “Vote With Their Feet”
by Tyler Durden
ZeroHedge.com
Jun 14, 2017
One month ago, Goldman warned that as the disconnect between the Fed’s interest rate and financial conditions, the easiest in three years, grows Yellen may have no choice but to unleash “policy shock” on the market, or in other words, be far more hawkish than priced in the by the market. After today’s latest disappointing CPI and retail sales data, she may have her chance, because as RBC warned last night, and followed up today, “this CPI was the ‘real’ event-risk for the day.”
And not just CPI, but Core CPI, which today printed at the lowest level since 2015, and would have been far worse, if not negative absent the positive contribution from shelter inflation.
3RD CONSECUTIVE WEAK CPI = LOWER RATES = REVERSE ENGINES!
As the entire global macro trade continues to be based upon the ‘disinflation vs inflation’ debate, today’s disappointing inflation data confirms the ‘slow-flation’ narrative and builds more justification into the ‘dovish hike’ Fed messaging-path (perhaps even ‘one and done’ over the balance of 2017 now).
The Rest…HERE
