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Good morning. The US CPI print continues to ripple through markets, the UK also reports slower inflation and China steps up its support for [View in browser]( [Bloomberg]( Good morning. The US CPI print continues to ripple through markets, the UK also reports slower inflation and China steps up its support for the economy. Here’s what’s moving markets.  —[David Goodman]( Market inflation euphoria The after effects of Tuesday’s lower-than-expected US CPI print continue to [ripple through markets]( as traders become more and more convinced global central banks have finished their aggressive interest-rate increases. Europe’s Stoxx 600 Index jumped, led higher by consumer product and mining stocks, while US equity futures pointed to further gains after the S&P 500 ended Tuesday with its biggest advance since April. MSCI Inc.’s Asia Pacific Index jumped over 2%, with all markets in the green. Fed officials last night [welcomed the latest data]( showing receding inflation, while adding that there’s still a ways to go before it reaches the central bank’s 2% target. UK joins the party The market narrative got a further boost on Wednesday [when the UK joined the party with its own slower-than-expected inflation reading.]( The nation said consumer prices rose 4.6% from a year earlier in October, down sharply from 6.7% in September and the slowest pace since 2021. The biggest drop since 1992 helped firm up bets on BOE rate cuts as early as the spring, and[sent UK stocks soaring.]( The jump lifted the FTSE 100 and the domestically focused FTSE 250 into positive territory for the year. What’s next? Attention now turns to today’s US retail sales and producer price reports, where strong readings could temper some of the Fed rate-cut exuberance. More insight into the strength of the consumer will also come when Target reports earnings. On [Bloomberg Surveillance yesterday]( Nadia Lovell at UBS Global Wealth Management recommended watching the retail sales data for “clues on the impact of resumption of student debt repayment.’’ Citigroup’s Stuart Kaiser said a strong number wouldn’t necessarily burst the bubble for stocks. “If you get another positive retail spending print, that is net positive for equities,” he said. “I’m still in the good-news-is-good-news camp.” China support Elsewhere, China [stepped up its support for the economy]( by pumping the most cash since late 2016 into the financial system with one-year policy loans. The People’s Bank of China offered 1.45 trillion yuan ($200 billion) of cash through its medium-term lending facility — 600 billion yuan more than the amount coming due in November. The net injection “went beyond market expectation,” said Becky Liu, head of China macro strategy at Standard Chartered. The extra support came the same day as reports showing that [China’s consumer spending and industrial output]( picked up last month. That provided a needed boost to the world’s second-largest economy. Copying Citadel Finally, several hedge funds in Asia are [starting to mimic global giants]( like Citadel and Millennium Management by charging clients additional fees to cover costs ranging from employee compensation to life insurance in a bid to lure top talent. Bei Hu and Nishant Kumar report that Nine Masts Capital recently introduced the so-called expense pass-through model, while Southern Ridges Capital embraced it last year. Meanwhile Pinpoint Asset Management has created three new share classes using this structure. The model may translate into higher fees than the traditional performance and management charges even as many hedge funds in Asia post weak returns. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Schonfeld ends Millennium talks in [call to fellow billionaire.]( - Leon Cooperman [takes stake in Manchester United](. - French train manufacturer Alstom [tumbles 17%]( after cutting jobs. - Tencent profit beats estimate in [defiance of China downturn](. - China [caps over-the-counter derivatives operations](. - Ken Griffin sees [Miami possibly replacing NYC]( as finance capital. - Rare [Inverted Jenny stamp](sells for a record $2 million. And finally, here's what Joe’s interested in this morning We talk about the Fed's dual mandate of low inflation and maximum employment. But only inflation — which has a target of 2% — is actually defined in a meaningful way. When it comes to maximum employment, well... we kind of know it when we see it. There's no objective definition of when the employment mandate is achieved. And this can lead to some bad economics. So, for example, [you can go back to 2015]( when people were talking about how the Fed had already achieved its employment goals, even though U3 was over 5%, and would end up falling much further (to 3.5%) before the pandemic hit in March 2020. In a sense, you never really know whether maximum employment has been achieved. All you can know is when you're failing. And the way you know you're starting to fail is if unemployment is on the rise, which it has been lately. Back in April, the unemployment rate was 3.4%. Now it's up to 3.9%. Maybe some of this is noise, and not a harbinger of something worse. But if the unemployment rate is rising its moving away from maximum employment almost by definition and that’s something the Fed has to pay attention to. Yesterday we got the dream CPI report. On a headline basis, there was no increase from month to month. The core number came in cooler than expected with just a 0.2% rise. Sure there's always a lot of volatility in individual components that could reverse next month. But there was certainly no smoking gun to suggest that the number was grossly misleading or unsustainable. In other words, it looks like we're edging towards a place where both sides of the mandate could create the impetus for rate cuts. Inflation is getting to be in a good place, and the employment data is traveling (albeit slowly) in the wrong direction. Speaking of employment. This past Friday, [Tracy Alloway and I published an interview with Claudia Sahm](, the creator of the much-misunderstood [Sahm Rule](. The rule says that, historically speaking, when the 3-month moving average of unemployment is half a percentage point above the 12-month low in unemployment you're in the early innings of a recession, and that it's a good time to send out stimulus checks. There are two important ideas embedded within the Sahm Rule, and people tend to only talk about one. The first idea is that once unemployment starts to rise, historically it rises a lot. A half a point increase in the unemployment rate may not look like much, especially if we're still hovering around 4%. But if such increases tend to predict recession, then a modest increase in the unemployment rate can quickly snowball into a big increase. The other important idea here is that we tend to realize that we're in a recession only once it’s well underway. Up until Lehman collapsed in September 2008, there were ongoing debates about whether the US was in recession or not. However, the NBER ended up dating the start of the recession to the end of 2007. It takes a while for reality to set in. Of course, once reality does set in, policymakers tend to do something, whether it's checks or just rate cuts. But by that point major damage has is already done. So this is why the logic of the Sahm Rule is built around the timing of automatic stabilizers. That part tends to get ignored by macro pundits. But the goal is to have a recession-fighting response earlier in the cycle, before it becomes conventional wisdom that we're in a recession. The goal is that in future down cycles, policymakers act prior to the downturn already having metastasized. Now at this point, anything resembling stimulus checks seems a long way off for a variety of reasons. But the Fed does have the capacity to stimulate, because it has so much room to cut now. With both sides of the mandate starting to say the same thing, and rate cut talks become more concrete, part of the question now is how "early" does the Fed want to be, and how much insurance does it want to take out to forestall the possibility of a real recession. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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