Unpopular Opinion:10YR and Fed is rightly yelling 'Transitory' through inflation noise

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Today market is divided in two camps. Inflation/deflation debate is right now on everybody's mind and a tug of war is going on. 
Greatest gains are made when everybody's pricing in an outcome which turns out to be different. Rapid reprising or corrections happens.
10YR rates have had a stellar run from 0.5 to 1.75, maybe fastest percentage growth in history. Rightly so, since then both hard and soft commodities have doubled or tripled. CPI data allover the world has been pretty high.
Whats dramatic in short term is quite Subtle in long term. You can also see periods of rapid rise which same kind of inflation narrative.

These spikes in interest rates can be clearly appreciated, and people older enough must be remembering how every other expert called for "death of fixed income" and "end of 30 yr long bond bull market".

Today market signals are pretty clear. I am in 'Inflation is transitory camp and most probably today's 5% CPI print is the peak.
Inspire of very high CPI prints and strong jobs reports since last 3 months, 10YR has merely moved.

There are lots of data, indicators and predictor to go into. But 10YR is the most reliable.
While CPI, PPI, PCE, ISM PMI  all are being coming upbeat, but keep I mind they are lagging indicators. 
I cannot imagine, how people couldn't see 10YR trading like its transitory. 10YR is most important thing to watch right now among all the noise.

Akhil Garg
CIO, Garg Capital 
akhilgargdps@gmail.com 


Twitter @gargcapital


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