Fed Chair Powell will doubtless be quizzed in some detail today about the implications of yesterday's startling CPI numbers for June. 

We're expecting the third straight outsized jump in the core CPI when the June report is released today.

The Dallas Fed last week published a short blog post—seehere—focused on the predictive power of their trimmed mean PCE inflation measure. 

Most of the action in the May CPI was in the Covid- sensitive components, again. 

A year or so from now, if the economy is beset by stubbornly high inflation, and the Fed is hammering asset prices by aggressively tightening policy in order to stem a further upward twist of the spiral, it's a fair bet that we'll look back to last week's data and say: "That's when they should have thrown up their hands, admitted they underestimated the inflation pressures triggered by unprecedented policy easing, and signaled a shift in policy."

In order to transition from low Covid-induced inflation to the sustained increases needed to persuade the Fed to tighten policy—remember, they have vowed to react to inflation data, not forecasts—three things have to happen.

It was easy for inflation doves to dismiss the 0.34% jump in the March core CPI as merely a correction, after three straight small increases, averaging just 0.06%.

Today's March CPI report will be the first to be hit by hugely adverse base effects on the anniversary of the Covid-induced collapse in prices for a broad range of services. 

The net risk to today's February core CPI data probably is to the upside.

The S&P 500 probably has fallen far enough fully
to reflect the valuation hit from the rise in Treasury yields, and the Nasdaq probably has overshot.