Calm in Choppy Markets, Surge in US CPI biggest in almost 40 years

Markets appear to welcome the respite as bulls jolt to life and hurry to recoup some of their recent losses. 

The onset of this relief appears to follow a 7% month-on-month rise in the US Consumer Price Index (CPI).

And the rapid increase in inflation, exacerbated by stricken supply chains and pandemic-induced stimulus, seems to have official policymakers concerned as well. In addition, Reuters reports Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina:

"The Fed is going to be forced to begin raising rates in March and depending on the political pressure on them – from both sides of the aisle – they are going to have to raise rates four or more times in this year and potentially more than that next year".

Psst... make sure to catch up on Q's coverage of US Federal Reserve Chairman Jerome Powell's statement in Edition #171.

In short, this most recent surge has placed inflation rates for US consumer prices at the highest in nearly forty years.

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The Federal Reserve expects price pressures to persist until mid-2022. 

Many markets responded positively—Crypto, in particular—saw some relief after several days of overbearing sell-side pressure backed off. Meanwhile, stocks and gold markets notably extended their respective bounces to a four-day streak of green.

Now, one question might be:

Will speculators seek to capitalise on the specific timeline of the Fed's inflation forecast?

Vis à vis consumer price rises persisting until mid-2022, or the central bank will control it via any means necessary—for example, bringing forward their tapering timeline is one pathway, and hastening interest rate hikes is another.

With a view of the fundamental landscape in mind, Q looks back over the trading day to formulate the latest technical insight...