The Fed Can’t Whip Inflation Alone

But financial markets, whether crypto or equity, are generally less worried about inflation’s direct impact on Main Street than about the Federal Reserve’s response via the money supply, aka its overnight interest rate. The muted equities drop so far, even on higher-than-expected numbers, reflects that the Fed has already announced an aggressive schedule of interest rate hikes, plans that have already pushed equity markets down nearly 15% since their January peak. In the parlance, even a higher-than-expected CPI result was to some extent already “priced in.”