There is a pretty strong consensus forming that the Fed is going to increase the pace of the taper at their next meeting. But they haven’t so much agreed on how much that increase will be. That allows for some wiggle-room in market forecasts. So, we could have a larger market reaction to the data, and this could be more pronounced in light of the circumstances. Last Friday, the market had a modestly positive reaction to record CPI data. That’s because it was expecting even worse data than the average of economists. The market does appear to agree with the Fed that inflation will moderate over time, but it has a much ... (full story)