Initial CPI Reaction

The widely-anticipated release of the month CPI report just came out, and with the ceaseless fears about inflation heating up, a “beat” to the upside has people mildly freaking out:

The short-term reactions have been violent. Silver is surging.

Gold is gushing.

Although let’s keep things in context. On a slightly longer time scale, the bounce in gold is little more than a bit of “fight-back” within a larger drop, sort of like a salmon swimming against the stream.

A particularly remarkable shift is with the small caps. After the number came out, equities fell at first, but the interest-loving small caps (thanks to banks) have decided surging inflation is great news.

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