Whether you're a bull or a bear, last night was only one number....

Whether you're a bull or a bear, last night was only one number. The Fed wants to see a trend before any sort of pivot, whether you take the pivot to mean an easing of rates, slower rate hikes or no more rate hikes. So that means the data for the next 2 months will be crucial.

Although last night's number was better than expected, we've had previous CPI readings that were lower than expected but reversed course the following month so as I said lower CPI prints have to continue for the next 2-3 months..

Furthermore if history is any guide Volker raised rates into double digits, something like 17% in 1980. When a recession occurred he stopped raising rates prematurely and started cutting them even though inflation hit a high of 14.7% in just the prior month. This easing of rates ended the recession but inflation proved stickier than expected and remained above 12% and Volker was eventually forced to raise rates to a peak of 20% in the middle of 1981 before inflation steadily declined. So the Fed will want to be absolutely certain that inflation has been tamed before pivoting.