- Even after taking into account upward revisions to the February data, headline PPI came in below estimates by .5% and core PPI by .2%.
- The strong price action that followed and persisted through the end of the day confirmed disinflation and even outright deflation remain risk bullish.
- Just as PPI was the leader in signaling the rising inflationary environment post-Covid, PPI remains the signal leader in the new disinflationary environment resulting from Fed policy. CPI will follow suit and I expect lower prints in the months to come.
- I believe the current 74% probability of another rate hike has a greater chance of being adjusted downwardly rather than upwardly, providing an additional tailwind to risk assets as the dollar and yields fall.
- I continue to favor growth and technology both absolutely and relatively.
