OANDA:SPX500USD   S&P 500 Index
The remarkable CPI inflation print of 7 percent was a non-event, as it came in just like expected and month-on-month numbers showed some deceleration.

Yes, growth tried to rally a bit, but honestly, who wants to go all in when inflation is hitting multi-decade highs while the fed funds rate is still at the zero bound? Huge shifts in monetary policy are coming for sure, and this is not the time to commit hara-kiri.

The overall trends are intact:

1) Yield hike expectations keep rising together with the short end of the yield curve and 3+ hikes are solidly baked in.
2) The long end of the curve is going nowhere really, and the yield curve keeps flattening since March 2021.

Both points combined suggest a Fed that is hiking into a disinflationary environment at best. If the economy stays alive during this baptism with fire, Cathie Woods wins. If the economy goes down the drain, Jeffrey Gundlach wins. If both are wrong Peter Schiff wins I guess, but I am not following him enough to be so sure about that.

Back to gamma: Net gamma sits at a modest 125M and it is imperative that the market stays above 4720 to avoid continuing trouble. 4750/4775 should be upside targets, I doubt we are going much higher.

Comment: Regarding the Wood/Gundlach/Schiff analogy that got picked up in the comments. As I try to wrap my head around possible outcomes of a tighter Fed I see basically two main outcomes: 1) Reflation (aka "Woods"): Inflationary pressure comes back and economy keeps growing. Back to business as usual basically. 2) Deflation (aka "Gundlach"): Inflation comes back, but economy slows down considerably. The third option would be the "Schiff scenario" that is rather unlikely: Economy tanks, Inflation keeps spiking. I do not actually know if Schiff is really advocating for that exactly since I am not following him, but this is what I pick up from a distance.