A great economy spells bad news. It is so great that wages zoomed, jobs zoomed, but the cycle of higher inflation is still expected to be what?
I warned this will happen. the heated economy now WITH a surge in wages can mean only one thing, INFLATION will pick up and do so quickly. Yup this should be the final move up for now. I don't see a close in positive territory. In fact, this news is so bad that when the market wakes up from its dream it will realize it woke into a nightmare situation.
The 10-year note started to wake up from a nice dream into a world that isn't so nice. Quickly roe above 4% again. January marks the start of the end. Inflation will come roaring back. How do i know this? Easy, WAGES SURGED! That means the consumer demand for wages was met and companies will once again raise their costs and prices to compensate.
THE INFLATION SPIRAL IS HERE The market has not recognized this fact yet. 4929 is my line in sand. If we close ABOVE (MY) assumptions is very wrong. The street should recognize the inflation implications TODAY! If it doesn't and we close above target MY ASSUPTIONS IS IN DOUBT!
Can we actually have such a strong report with jobs and wages at these rates without causing higher inflation? NEVER happened before.
MONDAY we get SERVICE report for JANUARY! It will be spiking higher. To put it simply the FED would be INSANE to lower rates this year with an economy heating up. The street is oblivious to this FACT! When will they wake up? Maybe today maybe Monda or not at all. Sleeping thru reality is a thing we are accustomed to.
So the logic of the street is that the FED will lower rates to relieve debt and borrowing costs as the economy is surging? Hello, anyone home. I expected this to happen but rushed it as usual. Now that it is here, we will see INFLATION as the number one topic this year.
Let the games begin!
