The dilemma the Fed is facing now

The CPI print was bound to start coming down. Housing prices went way too high relative to incomes. Diesel fuel prices went way too high relative to trucking company profit margins.

Etc.

With some disinflation now, stock and bond prices are rising . . . under the assumption that the Fed will be able to stop raising interest rates.

But they might not be able to stop. They might be forced to raise rates higher than anyone anticipated.

Why? Because they created such a flood of money and credit over so many years that now the slightest good news is able to send the markets re-soaring. There are still remnants of the deluge sloshing around in the system. It will continue to spurt off in all kinds of directions for years to come.

Good luck, Fed, trying now to rein in the volatilities, distortions, and crazy valuations. They represent your Frankenstein monster.