By prematurely cutting rates by 50 bps ahead of the election, even with inflation still running hot, the Fed has set the stage for an inflationary resurgence
The latest October inflation data released this morning confirms the trend, with PPI coming in at 2.4%, hotter than the expected 2.3% Meanwhile, core PPI rose to 3.1%, ahead of the expected 3.0% increase
The bond market is now in full revolt, with 10-year Treasury yields up nearly 70 bps since the Fed's began cutting overnight rates in September
Rising borrowing costs will become a major headwind for Trump's pro-growth, and likely pro-inflationary, fiscal policies
And it will soon become a major problem for investors paying a near record high 28x earnings in today's stock market
