The Exchange

Kelly Evans: Battle of the Inflation Bulge

Scott Mlyn | CNBC

Consider the following and then tell me what you think is going on. 

Paul Tudor Jones, on Monday: "If they say, 'we're on path, things are good' then I would just go all in on the inflation trades. I'd probably buy commodities, buy crypto, buy gold." 

Trading as of 12 p.m. Thursday: Gold -5%, Silver -7%, Copper -4%, Palladium -10%, Bitcoin -0.5%.  

Conclusion: Fed was hawkish.  

David Tepper, to Scott Wapner this morning: "I think the stock market is still fine for now," despite the hawkish dots yesterday.  

Trading as of 12 p.m. Thursday: Dow -1%, Russell -2%, Vix +4%, Nasdaq positive. And the yield on the 10-year, which spiked to 1.54% after the meeting yesterday, is all the way back down to 1.48%.  

Conclusion: Fed was maybe too hawkish, but Tepper says it will be fine.  

Conclusion: If the Fed was possibly too hawkish by barely lifting its rate-hike forecasts, then the market thinks deflation is still a bigger threat than inflation. 

 Conclusion: Then the Fed should have done nothing, which would have goosed the inflation trades, thus reinforcing the price-pressure-problems and all the NGDP vs. potential GDP problems Michael Darda has been warning about.  

Conclusion: Or maybe the Fed got it just about right? 

Conclusion: My head hurts. 

 See you at 1 p.m! 


Twitter: @KellyCNBC

Instagram: @realkellyevans

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