Inflation divergence between "soft" and "hard" data to resolve in coming weeks/month. Key yield curve not flashing recession.

This week is the start of 4Q22. Since Jackson Hole, both Fed and markets have priced in a significant increase in Fed tightening and these actions have raised concerns about financial accidents and worsened by Russia-Ukraine tensions. The Fed would like to see both labor markets slow (JOLTS, in particular) and meaningful progress on inflation ("hard" data like CPI, PCE, etc). With the Fed determined to fight inflation, investors naturally wonder how equities could even manage to rise in 4Q.

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