What's Scarier Than the Inflation Scare? Markets
Investors are displaying extreme confidence in the Fed’s ability to keep prices under control.
What do you mean, the S&P is at an all-time high?
Photographer: Hulton Archive/Archive Photos/Getty Images
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The bets have been placed. At this point, there is lots of money on the notion that U.S. inflation really is only transitory, that Jerome Powell and his colleagues at the Federal Reserve really mean it when they say that inflation is transitory, and that they care more about spurring a rise in employment. These propositions aren’t so far-fetched. But the confidence with which they are now being backed on the market does look most far-fetched, at least to me. This was a day when core inflation in the U.S. was revealed to be running at its fastest in 29 years, and faster than expectations — and yet it also saw the S&P 500 rally to a new all-time high.