Interest Rates, Inflation & Economic Indicators

Rates are gravity for asset prices: future profits discounted at higher rates are worth less TODAY — the longer-duration the story (unprofitable growth), the harder the hit. Rates also compete for capital (5% risk-free drains money from risk) and raise corporate borrowing costs. Inflation forces central banks to raise rates — the 2022 sequence (inflation → hikes → multiple compression, growth crushed, energy leading) was this textbook chapter in real time.

CPI (inflation → rate expectations), payrolls/unemployment (cycle health), yield curve (inversions have preceded recessions with famous consistency), ISM PMIs (manufacturing pulse, >50 = expansion), retail sales (the consumer). Markets move on the gap between the print and EXPECTATIONS — a 'good' number below consensus sells off; expectations are the real price.

You needn't forecast macro to respect it: know when CPI and Fed days land (volatility is scheduled), know which regime you're in (rising vs falling rates favor different sectors), and let the tape's REACTION to news outrank the news itself.