PPI Misses Across the Board — Rate Cut Setup Strengthens

Fresh inflation data just gave the market a clear signal: the Fed has room to cut sooner than expected.

PPI Snapshot (Actual vs. Forecast):

PPI MoM: -0.4% vs. 0.2% ✅
Core PPI MoM: -0.1% vs. 0.3% ✅
PPI YoY: 2.7% vs. 3.3% ✅
Core PPI YoY: 3.3% vs. 3.6% ✅
PPI ex Food/Energy/Trade YoY: 3.4% vs. 3.5% ✅

🧠 Prices aren’t just slowing — they’re contracting. Combined with soft CPI, this disinflation confirms a Fed-friendly trend and clears the way for policy easing.

🧨 The Twist: 10-Year Yield Spiked
Despite stocks falling, the 10-year yield moved up — a rare divergence in risk-off environments.

This likely reflects three key forces:

Hedge funds facing margin calls, forced to liquidate bond positions.

Political actors unloading treasuries amid U.S. fiscal tensions.

A potential counter-strike to Trump’s efforts to push yields down via market stress.

💡 Ironically, this may help the Fed. Rising yields tighten financial conditions on their own, giving Powell more space to act without risking an inflation resurgence.

🧭 Sector Playbook (Macro-Aligned)
Tech and Growth — Overweight. These sectors thrive on falling rates and an easing narrative.
Bonds — Accumulate. Yield spike could offer a prime entry point before a Fed pivot.
Crypto — Risk-On. Disinflation + volatility = breakout fuel.
Energy and Defense — Hold. May underperform in a growth-led rally (Besides nuclear).
Defensives — Underweight. Safety trade could unwind as liquidity improves.
Small Caps — Speculative. Could bounce hard if liquidity rotation begins.

⚠️ Final Thought

Markets are digesting short-term chaos, but underneath it all, the macro signals are aligning. Even without a "golden tweet," the inflation data is giving Powell the green light.

If the Fed wants to cut — the data is here. The only thing missing is confirmation from Powell’s tone.

#Disinflation #FedCut #YieldSpike #MacroUpdate #CPI #BondMarket #TradingViewIdeas #MarketOutlook #SectorRotation