“Stop making sense,” the Talking Heads once sang. The stock market took it literally on Thursday with a massive rally following an inflation reading that everyone agreed was way too hot. So what gives?
There’s no dismissing September’s consumer price index. The CPI rose 0.4% in September, up from 0.1% in August, and above estimates for 0.2%. Core consumer prices, which don’t include food and energy, rose 0.6%, above forecasts for 0.4%, and unchanged from August. CPI rose 8.2% year over year, down a tick from 8.3%, but core CPI climbed 6.6%, from 6.3%. Other than car and apparel prices falling, there was little in the report that inflation was anywhere near tamed.
