Denial Ain't Just a River in D.C.

Even with an undeniably red-hot CPI print this morning, plenty of market pundits and players, not to mention central bankers, remain reticent to admit that inflation is actually back on the rise. These folks are sticking to their guns regarding the notion inflation has already "come down significantly," and now we are simply enduing a bumpy path down to The Fed's (absurd and arbitrary) 2% target rate of inflation. Equities also remain stubborn as a mule on this topic, with Nasdaq buyers appearing on the opening gap down this morning to go for another bounce. 

However, with regard to the long end of the curve we are seeing market dynamics at play off the hot CPI data. Rates on the 10-Year Note are popping, while silver (second daily chart of the ETF, below) and silver miners are enjoying an energetic session so far.

CDE, on the first daily chart, below, is a domestic precious miner and the world's ninth largest silver producer. It has some of the best technicals of any silver mining chart I see, consolidating above all moving averages and sporting a strong bullish candle today before February 19th earnings. 

Given gold's steep rally to kick off 2025, silver (and possibly platinum and palladium, too) remains front and center to play catch-up as store of value amid this cognitive dissonance--Cutting rates since last September and now failing to seriously consider hiking them amid rising inflation certainly qualifies. Once again, a similar dynamic happened in the 1970s and gold was the best performing asset, with silver eventually having its day in the sun, too. 

Oh, and equities did get cut in more than half, too, once bulls realized profit margins would get squeezed amid high inflation. Denial ain't just a river in D.C., after all.