For the first time in over a year, I think the market and the Fed are more concerned about inflation than they should be.
In short, Friday was simply an absolute disaster for the U.S. in macroeconomic terms.
Now that rotational action between growth and value is picking up steam, the disparity between index and individual stock performance is even greater.
It's now clear that the first part of January has exhibited a marked change and reversal in pattern.
Plus, many economists don't seem to understand the term "full employment" and earnings season kicks off.
The Fed is always backward looking, and that's why the market is unsure of where to go for now.
I do think that the Fed is on the case. I do not think that the Fed is as late as so many seem to.
Thursday there will be another reading on inflation when the PPI report is released as well as weekly unemployment numbers.
The Fed has to take some action: No matter how you slice it, 7% CPI is an unacceptable inflation rate. Here's my take on inflation and what's ahead.
The latest look at inflation is expected to produce the biggest increase in nearly 40 years, but the big question is to what extent it already is discounted by the market.