Equity markets moved lower on Friday to end an uncertain week on a down note. The market is wrestling with the true meaning of the latest inflation data, and the early analysis is not good. The pace of inflation is stabilizing at current levels if not accelerating, which means the FOMC has yet to accomplish its goal. In this light, it may not be if the FOMC causes a recession but when because it may have to in the fight against inflation.

This week will be another tough one for the market. The following PCE Price index report is due out on Friday and it may echo the news in the CPI data. In this scenario, the odds of another 50 basis point interest rate hike will rise and there is still another month of data to go before the next Fed meeting. The takeaway here is that inflation is still a problem, the FOMC is still raising interest rates and the outlook for S&P 500 earnings is still in decline. Not much of a catalyst for the market to rally on.