**SPECIAL REPORT: CPI Comes in Hot, Zoltan* Warned of This

*Services inflation is almost entirely a function of domestic economic activity. The Fed has to get that lower. No rate hike will get supply-chain inflation in check. And we will have a nasty recession on top of it. Domestic services inflation must come down.

- Zoltan Pozsar, from Cure Inflation "By Forcing Long Term Rates Higher"

Contents:

1. Inflation comes in hot

   1. Why it matters today

   2. Why it matters for 6 months

   3. Stagflation on radar

   4. Fed *not* easing “creep”

   5. Preview: how CRE effects us

   6. Speaking of Zoltan¹

2. Gold vs. Bonds Anti-Goldilocks Play

   1. Pure inflation play

   2. Bonds are not risk off now

3. Goldman’s CTA Research and Analysis

   1. Gold, Silver, Oil and Copper

   2. What to expect in every market

   3. Why CTAS do what they do

CPI COMES IN VERY HOT… THE BAD KIND

• CPI Expected 2.9% surprised with a +3.1%

• Consumer prices rose 0.3% MoM (more than the 0.2% exp)

• CPI Core: The index for all items less food and energy rose 0.4 percent in January.

• Headline declined from +3.4% to +3.1% YoY.