Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It's called the graph.

Quick recap

• Inflation and monetary policy made headlines again this week as US CPI’s came in higher than expected, printing an increase of 7.5% y/y. As a result, markets are now pricing in seven rate hikes over the next 12 months.
• While the rise in short term rates attracted a lot of attention this week, long-term interest rates and inflation expectations as indicated by 30Yr Treasury Bonds remain well-anchored.
• Markets still don’t seem to believe in permanently higher inflation but rather prepare for a policy error.
• The S&P 500 retraced by 1.8% this week, but European and Asian markets ended the week higher.
• The style and sector rotations in equities continued this week with Defensives underperforming Cyclicals and Quality and Momentum losing against Value.

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