So suddenly inflation is evaporating, what a shock! If you are surprised you shouldn’t be.

It is likely that inflation will continue to fall as well.

The oil rebound was what fueled the “inflation spike.”

Which caused the 10 year to fall.

^TNX data by YCharts

But the Fed raised rates. Causing the yield to continue to flatten more.

So as this continue to happen, this could be the one of the major overhang for the markets currently on the horizon. The perception the Fed is tightening into a slowing economy.

But it is ok the Fed will now start “unwinding” the balance sheet creating Inverse QE. Helping to push rates higher still.

But alas, Atlanta Fed GDPNow came in today at 3.2 percent.  More tomorrow….

Michael Kramer is the Founder and Portfolio Manager of Mott Capital Management LLC, a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendation made during the past twelve months. Past performance is not indicative of future performance.