Recently Federal Reserve Chair Jay Powell said he is targeting inflation.
Perhaps the market is seeing something similar. This prompts today’s question (and chart):
Are the markets about to send a new message regarding inflation?
As you can see, commodities and yields have been in a downtrend for several years – the Commodity Index is marked by each (1).
But both have recently perked up.
If commodities and yields breakout at each point (2) and (3), odds increase a new round of inflation is about to start. Stay tuned!