What’s the opposite of a “Goldilocks” market?

A Big Bad Wolf market? A Sauron market? An Evil Stepmother market?

The reaction to this morning’s inflation report suggests me might need a name for this kind of market.

The worry, my worry, going into today’s Consumer Price Index (CPI) inflation report from the Bureau of Labor Statistics was that inflation might run above economists projections and that could trigger another down leg in the market on fears that the Federal Reserve would be more aggressive about raising interest rates in 2019. (The Fed has signaled three rate increases for 2019, after a rate increase in December 2018. The market is clinging to fading hopes of just two interest increases in 2019.

The data showed that headline CPI and core CPI, which excludes food and energy, increased by 0.1% month to month in September. That was below the 0.2% increase expected by economists surveyed by Briefing.com.

So what did the market do?

After an initial flat open–well down slightly–the major U.S. indexes have moved significantly lower on the day. Not “lower” as in “a rout” like yesterday’s market action. But as of 2 p.m. New York time the Standard & Poor’s 500 index was off 1.07% and the Dow Jones Industrial Average was lower by 1.05%.

The CPI inflation numbers seem to have found the market’s sore spot.

Inflation was low enough to raise fears that the economy isn’t growing as fast as hoped.

And, at the same time, inflation is strong enough to keep the Federal Reserve on track for a December interest rate increase.

The year over year headline inflation rate dropped to 2.3% year over year from a 2.7% annual rate in August. The year over year core CPI was unchanged from August at 2.2%.

Now granted that the Federal Reserve doesn’t use the CPI to track inflation. It prefers a measure call Personal Consumption Expenditure (PCE). And given that the CPI tends to run hotter–by as much as 0.5 percentage points–than the PCE the 2.2% annual rate in core inflation in the CPI still looked strong enough to lead the Fed to raise interest rates in December. The Fed’s inflation target is 2% but keep in mind that the Fed’s biggest goal is making sure that expectations for rising inflation don’t get embedded in the economy.

Oil prices fell today–and what I think is a combination of sell on the fact of Hurricane Michael and worries about falling demand for oil if the global economy slows. U.S. benchmark West Texas crude as down at 2 p.m. New York time by 2.82% to 271.11 a barrel. International benchmark Brent crude was lower by 3.12% to $80.50 a barrel.

The yield on the 10-year U.S. Treasury is down 2 basis points ti 3.15%–a very good performance given the size of Treasury auctions this week.

The dollar, however, continued to fall with the Dollar Spot Index off 0.44% on a move beBlow the 50-day moving average at 95.22.