Outlook: The calendar today has import and export prices and revisions to various other data, but the only potential market-mover is the preliminary May University of Michigan's consumer confidence index. As we complain quite often, it’s based on a tiny sample and doesn’t deserve the headline.

Weirdly, the market didn’t focus on PPI, which rose 0.5% m/m in April, pretty much in line with forecasts and better than 1.6% the month before–but only on the m/m basis. Trading Economics reports “Year on year, wholesale prices rose 11%, above market expectations of a 10.7% gain and compared to 11.5% in March. Still, producer inflation is running at the highest rate in 40 years and the report didn’t show much sign that price pressures will ease considerably in the near future.”

The important news also went by with little notice–Fed chief Powell said we should expect 50 bp hikes at each of the next two meetings, meaning July as a well as June. He also said whether the US gets a recession is due to factors outside the Fed’s ability to control. We are glad to hear this–maybe it will shut up some of the more stupid commentators. Perhaps Powell is a little braver now that he was confirmed for another term. For what it’s worth, we think the ultra-dove Kashkari (Minneapolis) repeating that the neutral rate is about 2% is discrediting to doves. It’s a foolish statement that implies the current bout of inflation is, historically, an aberration.

For what it’s worth, Musk put the acquisition of Twitter on hold to investigate whether the company accurately represented the percentage of users who are fake in any way. This moves the debate from freedom of speech to corporate lies and corporate management. Nobody know whether he has an ulterior motive here but he is sure getting enough publicity for any ego. Separately, all the cryptos are tanking, even those named “stable-something.” Told you so.

This is very much a TGIF Friday. Volatility in equities has been exhausting. Even the retreat and recovery in the bond market has been troubling. We chose to stay out of pretty much everything today, not only because of all that uncertainty but also because on recent Fridays, traders have bailed from their positions in droves. It can go without saying that the dollar is overbought and some currencies are so oversold (pound, Swiss franc) that there is no justification to hold, lest something emerge from left field and restore normalcy. We continue to see a strong dollar, but beware the looming correction.


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