Ordinarily, one might have thought that troubling inflation news that came out on Thursday morning would have been enough to cause some to question whether the bull market would be able to continue.
Even when you remove the volatile food and energy categories, so-called core inflation rose 0.7% for the month and has gone up by 3.8% since May 2020.
Used car and truck prices spiked 7.3% higher after a 10% jump in April, bringing their year-over-year gains to nearly 30%.
Interestingly, the financial markets gave a collective yawn to the numbers.
However, this time around, it seems that investors are more confident that the Fed will remain lax in its monetary policy even with these pressures.
With interest rates remaining low across the yield spectrum, the opportunity for big banks to profit from rate spreads simply doesn’t seem to be growing despite the inflationary news.
It takes time for economic trends to assert themselves, so even two straight months of concerning numbers shouldn’t cause a panic.