Ambrose Evans-Pritchard on the recent inflation indexes, which are signaling a return of inflation.

But before you get to that, let me quote from my friend Peter Boockvar’s private note. He is talking about the Fed's ignoring the data that they say they are dependent on:

Bottom line, yields fell sharply in both the short end and in the long end because the Fed, while acknowledging the uptick in inflation, seems very nonchalant with it and they are still worried about international developments and the tightening of financial conditions (which they themselves have caused). The dovishness and complacency is putting policy further and further away from the reality of the actual data they tell us they are so dependent on. The unemployment rate and the inflation rate are about at their year end 2016 target and they seem still very afraid to hike rates. And, there will ALWAYS be global risks. What is now going to happen unfortunately IF the trends in the labor market and inflation stats continue is the bond market is going to tighten for them and that would not be a pretty place for them to respond from. They basically blew off the 2.3% and rising core rate of CPI like it’s a meaningless statistic while core PCE could be at 2% in just a few months.

The fed funds futures has completely taken out the 2nd hike it was beginning to price in this morning (thus they only have one dot this year). The odds of a hike by June is down to 46% from 64% just prior.

VERY interesting times.