Yesterday's rate hike drove yields on the 10 year Treasury to 2.57% intraday, and this morning they went as high as 2.62%.  This is higher than in 4 of the last 5 years as shown in the below graph, which subtracts 2.50% from yields:

This is NOT a sign of short term weakness, since the yield curve has been widening:

But mortgage rates were also driven to highs not seen since early 2014:

This is going t slow down the housing market next year and ultimately the economy as a whole.

Turning to inflation, the tailwind from energy has disappeared, as shown in the below graph of the YoY% change in gas prices:

My guess is that this will turn into a headwind over the net 6 - 18 months, but I am not an energy supply maven, so I will be guided by the data.

Helped by gas, this morning's +.2% reading means that consumer prices since February have risen by 1.9% in 9 months:

That's a 2.5% YoY rate.  I expect this to increase, and so I am expecting further Fed rate hikes.

Over the near term, the stock market obviously expected higher corporate profits:

But here is aggregate real wage growth since the bottom on inflation in February:

I expect real aggregate wage growth to stall next year, and possibly decline. An an individual basis, real hourly wages already have:

So while improved housing, the stock market, and a widening yield curve forecast near term growth, I expect inflation plus poor nominal wage growth to put a damper on the consumer, and housing to sputter as the higher interest rates begin to affect it.  When yields on long term treasuries react to talk of a rate hike by *declining,*  that is the signal that the Gales of November will have succeeded Indian Summer.  But I do not expect to see that for 6 months at the absolute minimum.