• Inflation cooled, but it’s still running hot at over 4.5% core.
• The Index of Leading Indicators is trending lower and accelerating.
• The market may rally, but there is no reason to think it will last.
• 5 stocks we like better than SPDR S&P 500 ETF Trust

The PCE price index cooled on a month-to-month and YOY basis, precisely what the market wanted to see. The bad news is that the index cooled less than expected at the core level YOY and remains hot at 4.7%.

At this level, inflation has peaked but is still trending in a range that is more than double the Fed’s target and has them on track to continue hiking rates well into 2023. The added risk is that those upward revisions to previous data are also still in the picture, so there is a chance we’ll see this month’s figure pushed up in the coming months.

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