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* FIEND'S SUPERBEAR MARKET
REPORT *
* April 15,
2026 *
* *
* e-mail:
fiendbear@fiendbear.com
*
* web
address: http://www.fiendbear.com *
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Fiend Commentary
================
Transitory
Inflation, Again?
Oil fell
back toward the low-$90s, stocks rallied, and the market started acting as if
the hard part was over.
That may be
the most revealing thing about this week.
With hopes
rising that the Strait blockade is pushing everyone back toward negotiations,
investors have gone right back to the old playbook: buy stocks, sell fear, and
assume any inflation spike tied to energy will be temporary enough for the Fed
to eventually ease anyway. The S&P 500 has climbed
back to within a fraction of its January closing high, and the Nasdaq has bounced sharply as traders convince
themselves that whatever the war did to energy prices, it won’t last long
enough to change the bigger story. Meanwhile, gold is back in the high-$4,700s
and silver is pressing back toward $80 after the spring washout. The metals
aren’t raging higher, but they aren’t exactly going away either.
The problem
with that optimism is that the inflation backdrop is already getting worse.
March
producer prices rose 0.5% and are now up 4.0% from a year ago,
the hottest annual pace since early 2023. Core PCE, the Fed’s preferred
inflation gauge, is estimated to be running around 3.2%, the highest in two years. That was before we’ve had time
to fully absorb what another month of elevated oil, shipping disruptions,
insurance costs, and military spending could do to the April and May numbers.
So yes, crude falling from the panic highs is a relief. But relief is not the
same thing as disinflation.
This is
where the market’s “transitory inflation” instinct becomes dangerous.
You can
already hear the argument forming: energy is a one-off shock, the war premium
will fade, and the Fed can look through it. That may be true in a narrow sense.
But markets are not waiting for proof. They are already behaving as if
inflation will be allowed to run a little hotter so the Fed can stay patient
and eventually cut if the economy softens enough. That’s a big assumption —
especially with the economy already looking uneven and the labor market showing
growing signs of fatigue.
And while
the Fed is not calling it QE, its balance sheet is no longer shrinking the way
it was. The New York Fed’s “reserve management purchases” are still adding
roughly $40 billion a month in Treasury bills, even if the official
language treats them as plumbing rather than stimulus. Traders understand the
practical effect even if policymakers insist on the distinction. In a market
that lives on liquidity, a balance sheet that is still quietly expanding makes
it easier to believe inflation can be “managed later” while asset prices are
supported now.
That is why
the current calm feels so deceptive.
The market
is betting on a very delicate combination:
That’s a lot
of things that have to go right. And if even one of
them goes wrong, the “business as usual” mood can reverse in a hurry.
For now,
investors are choosing to believe that high oil is temporary, inflation is
manageable, and the Fed still has room to cut later in 2026. Maybe they’re
right. But just calling something “temporary” doesn’t change the numbers. It
only changes how long people are willing to ignore them.
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