Inflation Heat

The shadow's high
On the darker side
Behind the doors
It's a wilder ride
--Glenn Frey

Stock futes flipped over this morning after CPI numbers printed higher than expected. Not exactly 'hot' though, as the core CPI came at at 2.1 vs 1.9 exp.

In the scheme of things, measured CPI still looks tame. However, market participants may be waking up to the reality that the Fed Funds Rate has been below the core CPI for about 10 years--by far the longest period in history.

Central banks who, by their easy monetary policies and negative real rates, have been trying to stoke inflation should be careful for what they wish. Once released, the inflation genie is difficult to get back in the bottle.