CPI Report Sparks Positive Market Response, but Raises Concerns About Inflation

The October CPI report sparked a positive response in the financial markets, with stocks and bonds reacting favorably. However, there are concerns about the market's strong reaction to the CPI report, which may indicate a potential downward trajectory of inflation. The Fed's preferred inflation measure, Core Services Ex-Shelter, rose to 3.9% year-over-year. The market's response to the CPI print indicates significant risk, and investors should adjust their positions accordingly.