FAST FIVE: Stocks Puke As Soaring Inflation Sparks Hawkish Moves In Money Markets
Stocks Puke As Soaring Inflation Sparks Hawkish Moves In Money Markets US equity markets just got monkeyhammered, with Small Caps and Big-Tech hit the hardest and unable to hold the bounce.
Inflation breakevens ripped up near their 2004 highs.
And money markets are increasingly pricing in a rate-hike by Dec 2022.
The CPI print prompted inflation swaps, caps and floors to price in a 42% chance of CPI being above 3.00% in 5 years.
Of course, this is all transitory and the fact that the dollar has already erased its 'hawkish' spike suggests the market doesn't see this shifting The Fed's dovish stance.