Inflation concerns causing market volatility:

The Federal Reserve is signaling that inflation pressure is still a major concern. At every turn the FOMC members are talking tough on inflation. This hawkish rhetoric is keeping the bond and equity markets under pressure. The next CPI report will be on Wednesday June 14th this will be a major piece of information that will likely set the policy decision for the Fed.

The stock markets are selling off again today due to the Fed remarks and the rise in crude oil price which is feeding inflation concerns. Crude is trading around $72.00 again this morning.

It is interesting to note that the CEO of British Petroleum (BP) is talking about crude oil falling all the way back to the $35-$40 range over the medium term. This is a considerably different forecast from the rest of the market and if BP really believes this you should see their hedge book move to fully hedged over the next while to lock in the current high prices. I don’t think anyone is that bold but you never know will be interesting to see if Mr. Brown is willing to put his company where his mouth is.

Have you seen the Apple commercials lately? These spots are focusing on the Macintosh and pointing out the differences between Macs and PCs. This may be an indication that Apple is seeing an opportunity to capitalize on the Ipod phenomenon as a marketing edge for their computers. It will be interesting to see if the Ipod can bring in new Mac users.