FRIDAY UPDATE: Treasuries response to PPI data on Friday could mean that they're ready to go lower, not higher, if CPI comes in higher than expected next week. That would be outcome #2 instead of #3.
I still think #3 is the biggest risk to the markets, but #2 might have edged ahead of it in terms of likelihood. Rising PPI doesn't necessarily guarantee that it carries over to CPI, but it does look like the trend I talked about could be playing out here.
FRIDAY UPDATE: Treasuries response to PPI data on Friday could mean that they're ready to go lower, not higher, if CPI comes in higher than expected next week. That would be outcome #2 instead of #3.
I still think #3 is the biggest risk to the markets, but #2 might have edged ahead of it in terms of likelihood. Rising PPI doesn't necessarily guarantee that it carries over to CPI, but it does look like the trend I talked about could be playing out here.