Part 5/9:
In light of recent inflation statistics, Elliot pointed out the complicated relationship between national price indices and expectations in the bond market. The Producer Price Index (PPI) did not yet capture the ramifications of newly implemented tariffs, and the markets reacted strategically, anticipating loosening monetary policy. Elliot argued that inflation itself would not be the focal point in 2025, as the environment would likely be characterized by stable consumer price growth, with growth driving fluctuations in asset prices far more significantly than inflation expectations.