Equities rallied on the week in anticipation of a better‐than‐expected Consumer Price Index (CPI) report and a dovish pivot from the Federal Reserve.
The S&P 500 finished the week up 1.6% with core bonds flat. However, it was likely a more painful ride for investors than the return numbers would suggest.
Most analysts were predicting the CPI would come in lower than expected and that stocks would surge. JP Morgan, for example, issued comments that the S&P 500 could go up 10% in one day if the CPI came in low enough.
This is some evidence of euphoria and fear of missing out, the kind of thoughts that central banks have been pushing back against in recent months.