What’s Behind the Market’s Wild Overreactions

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The Wall Street cliché is that investors hate uncertainty. Their response recently has been to swing from being entirely certain about one thing to quite sure that the opposite is true, leading to violent moves in the markets based on thin evidence.

This week’s inflation figures marked the denouement of yet another shift in the market narrative, and what on the face of it was a wild overreaction to some good inflation figures.

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