Today, Main Street’s reality has become Wall Street headlines. This usually means disruptions in game plans and investing models, because the latter is rarely on the same page.

Too Damn High!

This morning's CPI reports everyday economic pain and challenges that the experts ignored or dismissed out of hand.

• The rent is too damn high.
• Food prices are too damn high.
• Auto insurance is too damn high.
• Medical care services are too damn high.

Meanwhile, the NFIB reported small (also known as Main Street) business optimism ticked lower, partly by a twelve-percentage point decline in expected actual sales moving higher.

So, where does this put the Federal Reserve?

To his credit, Jay Powell and the company only forecasted three rate cuts, which Wall Street initially interpreted to mean seven rate cuts.   But look at this spike in Powell’s favorite inflation gauge.  If this is not an anomaly, three rate cuts in 2024 are a pipedream.

The street is clinging to four rate cuts this year, with the first in June.

The Ten-Year Bond yield is surging, and soon, that small gap between 4.70 and 4.80 could come into play.

I love these shakeups, even when they make us uncomfortable, because great stocks get cheaper, and expensive stocks exhibit even more weakness.

Before inflation was reintroduced as a serious threat to the economy, after the so-called COVID-19 Relief Bill poured $1.9 trillion on top of trillions of existing stimuli that would never be accounted for or paid back, inflation reared its ugly head.

And it hasn’t been easy to arrest its growth or curb its impact.