Rebel Capitalist News New Inflation Data Shocks Market, Risk Assets Explode, Big CBDC News
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Jan 20, 2025 Recent inflation data has shocked markets, driving risk assets to new heights as the Consumer Price Index rises. The discussion delves into how inflation expectations interplay with interest rates and the speculative nature of cryptocurrencies versus traditional assets like gold. Central bank digital currencies face significant challenges, raising concerns about authoritarian control. Furthermore, the decline of authoritarian influence is highlighted, alongside an announcement for a virtual conference on pressing economic issues.
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Market Reacts to Inflation Data
- CPI ticked up, but core CPI was lower than predicted.
- This caused yields to fall, the dollar to react ambiguously, and stocks to rise.
Core CPI and Fed Actions
- The market focuses on core CPI to predict Fed actions on interest rates.
- The probability of a Fed pause increased, impacting asset prices.
Inflation Drivers
- Sustained CPI increases require corresponding M2 growth.
- Tariffs and oil prices alone won't cause significant inflation without increased money supply.