Stock Market Sells Off Yesterday As Key Inflation Rate Hits 40-Year High

The stock market sold off Thursday, as a key inflation rate hit a 40-year high. Meanwhile, oil prices tumbled after President Joe Biden tapped the nation's emergency oil reserves.

Stock Market Uptrend

Ahead of the market open yesterday 3-31-22 , the personal consumption expenditures (PCE) price index — the inflation rate most closely watched by the Federal Reserve — showed that price pressures accelerated to a new 40-year high, but prices excluding food and energy were a bit tamer than expected. The PCE price index rose 0.6%, the biggest monthly gain since 2008. The annual inflation rate rose to 6.4%, highest since January 1982. Core prices, minus food and energy, rose 0.4% on the month. The annual core inflation rate picked up to 5.4%, the most since April 1983.

The 10-year U.S. Treasury yield ticked down to 2.32% Thursday, falling for a third straight day. CNBC reported that in late trading Thursday, the yield on the corresponding 2-year note ticked up to 2.377%, marking a further inversion of the yield curve.

A yield curve inversion, or when the cost of borrowing money in the near term is higher than the cost of money in the longer term, has often signaled a warning that the economy is at high risk of entering a recession.

In Summary we are seeing inflation pick up and the BOND MARKET is sending signals of a Recession is coming soon. Consumer Sentiment had already sent a Signal last year that a Recession was coming sometime within the next 18month and the Consumer Sentiment has never been WRONG

Source

IBD,BTA