Last Wednesday, if you somehow had a premonition that the Consumer Price Index (CPI) was NOT going to show signs of cooling but instead surprise to the upside to bring core CPI to its highest annual pace in four decades, you would have expected markets to tumble on Thursday.

And you would have been right until about 11 a.m., when markets didn’t just get back to breakeven, but went on to post strong gains. The S&P 500 intraday range from the lows in the morning to the highs at the close was about 5%. The biggest angst for the markets this year has surely been the path and stickiness of inflation, so it befuddles the mind to make sense of Thursday’s market reaction, even with Friday giving back some of the gains.

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