More Datapoints Lining Up To Support A Fed Rate Cut

I'm getting a late start blogging this morning, but the markets are bouncing back from yesterday's drubbing in a big way.

The core PPI came in lower than expected this morning, pushing the year/year inflation rate to +1.5%. This is well within the Fed's targeted range, but more importantly, it indicates that inflation pressures are easing.

This is the third major datapoint that helps make the case that the Fed could cut rates sooner rather than later. The first was the very weak employment report we got last Friday. Then, yesterday's retail sales figures were terrible, very weak. And today, we get a report that inflation pressures are easing.

The market agrees with this assessment, and that is why we are seeing such a positive response in terms of stock action today. And bond yields are moving slightly lower, with the 10-year yield hitting 4.60% earlier today.