The United States Department of Labor reported this morning that the Consumer Price Index (CPI) increased 0.4% in the month of September, compared to a rise of only 0.1% in August.
Overall, consumer prices increased 8.2% in the last year, compared to the consensus estimate amongst economists of 8.1%.
The markets expectedly sold off sharply in early trading before mounting a massive comeback swinging more than 5% to close the day up 2.6%.
Commenting on today’s wild trading session, Michael Contopoulos, director of fixed income at Richard Bernstein Advisors, had this to say:
“There may be some short covering going on, but also, a lot was priced in. There has likely been a fair amount of defensive positioning lately in equities, and on the rates side, higher policy rates means higher probability of a hard landing.”