Part 2/14:
The day’s chaos was triggered by the Consumer Price Index (CPI), which came in at a 0.1% rise—a little higher than expected. Markets initially reacted with panic, fearing persistent inflation. However, seasoned traders and analysts quickly noted that such minor deviations are already priced in. This demonstrated once more that the Federal Reserve (Fed) has limited control over inflation, as their blunt instruments, like rate hikes, lag behind actual economic conditions. Moreover, the CPI data relies on outdated metrics—rent and other costs from months ago—rendering it less effective as a real-time indicator.