The equities market slipped again on Wednesday, although the move was muted in relation to the prior session. The S&P 500 shed about 0.25% at the low of the session but closed with a small gain following a mixed PPI report. The PPI data fell slightly on a month-to-month basis but remains very hot on a core and YOY basis and points to additional price increases for consumers down the road. The news was not-as-bad as feared but bad enough and should help seal the deal on a 75 basis point rate hike at the next FOMC meeting in just 7 days.

With the CPI and PPI still running hot and the FOMC on track to raise rates another 150 bps by the end of the year the odds of a major recession have grown very high. The first glimmers of that recession can be seen in the housing market, which is seeing a high double-digit decline in the pace of mortgage apps and new and existing home sales.