Summary: A breakout failure, hawkish Warsh surprise, weak seasonality, and High Trend Fragility suggest odds favor a sentiment washout is on the table.
The sub-7% containment thesis rests heavily on those breadth/internals, but the dealer leverage point is kinda wild. If bond vol spikes and dealers start dumping inventory simulatneously, that breadth support could disappear fast. I've seen this setup before in 2018 when vol-targetting funds unwound. The stagflation regime indicator hitting 80% is also worth tracking closely given precious metals could flip from weak hands shakeout to serious positioning by Q3.
The sub-7% containment thesis rests heavily on those breadth/internals, but the dealer leverage point is kinda wild. If bond vol spikes and dealers start dumping inventory simulatneously, that breadth support could disappear fast. I've seen this setup before in 2018 when vol-targetting funds unwound. The stagflation regime indicator hitting 80% is also worth tracking closely given precious metals could flip from weak hands shakeout to serious positioning by Q3.
No one believes the CPI numbers. Reference the CPI number is a disservice,