Happy Friday, Bull Sheeters. U.S. futures are holding onto gains this morning, looking to close off a stellar week on a high note. That’s after the Fed’s big policy shift on inflation yesterday more or less locks in for the foreseeable future this era of rock-bottom interest rates. Reminder: low rates are generally terrible news for Treasurys, great news for growth stocks.

Let’s check in on the action.

Markets update

Asia

• The major indexes are mixed, with Japan’s Nikkei the laggard, down 1.4%.
• The Japanese markets took a dive after the state broadcaster revealed a shocker: Prime Minister Shinzo Abe will step down for health reasons.
• The plot around TikTok’s future thickens after a shuffle at the top, and a new suitor, Walmart, emerges for the U.S. business. The retailing giant will join forces with Microsoft as the courtship intensifies.

Europe

• The European bourses were mixed in mid-morning trade with Germany’s Dax down 0.3%.
• Bayer shares were down 3.4% on Friday morning after a U.S. judge threw fresh doubts on the company’s $11 billion Roundup weedkiller settlement.
• Europeans are returning to auto showrooms, and they appear to have one major request: show me your electric-powered cars. EV registrations soared to record levels last month leading an autos analyst to declare, a “‘V’ shaped recovery in the European car industry” is possible.

U.S.

• U.S. futures are solidly higher this morning after the S&P 500 set a new all-time high for a fifth straight day. The Dow briefly went positive for the year in yesterday’s session after Fed Chairman Powell signaled low interest rates may be here to stay.
• Yesterday’s lousy jobless claims report wasn’t enough to push Washington into deal-making mode on a new stimulus package. The Dems and White House are still at “a tragic impasse,” House Speaker Nancy Pelosi says.
• Abbott Laboratories shares were 3.5% higher in pre-market trading, adding to yesterday’s gains, after news broke that the U.S. government is purchasing 150 million of its rapid-testing COVID kits.

Elsewhere

• Gold is up, but continues to trade around $1,950/ounce.
• The dollar continues to be volatile in FX trading after the Fed’s pronouncement yesterday.
• Crude is flat.

By the Numbers

>1 million. In just one week out of the last 23—dating all the way back to March—weekly jobless claims have come in above 1 million, adding to the carnage in the labor market. Yesterday’s figure came in worse than economists’ estimates at 1.06 million. Just as worrying, continuing claims came in at 14.535 million, also worse than expected. Since March, 58 million Americans have filed for unemployment benefits. The markets reaction to this grim update? The S&P and Dow finished the day broadly higher.

2%. That was the Fed’s long stated goal for inflation. Once prices shoot above that threshold, the instructions read, central bankers are to go into action to determine if an interest rate hike is needed to rein in an overheating economy. The thing is, we’ve been living in an age of tepid price growth, as the chart below shows, even as central banks print money and flood the markets with cheap credit. How can this be? Didn’t we learn in Econ 101 that too much money in circulation would lead to a rise in prices? Throw that book out. The big fallacy is that it assumes that everyone in the economy is dealing from the same deck of cards. That hasn’t been the case for decades.

The ugly truth is massive income inequality, on the scale we have in America and most other developed economies, magically subdues inflation. (Inequality also does a job on economic growth.) We haven’t had real inflation in 40 years. Inequality has soared in that period. The Fed’s decision yesterday to throw out the old playbook on inflation, to let it run higher if need be, is being hailed as a landmark moment in monetary policy. The hope is it will boost the labor market (see figure above for why that’s so crucial). In the short term, the Fed’s move yesterday will mean inflation rates will stay near zero, and guess what benefits from that scenario? Equities. The Fed is telling the world its priority is full employment, but Wall Street is reading it differently. “The issue remains: will the Fed’s ultra-easy policies actually stimulate accelerating economic activity, or just pump up asset prices and make the stock market happy?,” Berenberg economists Mickey Levy and Roiana Reed wrote in an investors note yesterday.

I think we know the answer.

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Postscript

I’ll be back next week with a proper Postscript or two (if I manage to make it off deadline for a feature I’m writing on one of the banking world’s biggest success stories. Stay tuned for that.)

I just wanted to leave you with a quick update on Scilla, our Lagotto pup. We’ve found a local dog trainer who promises to hone her truffle-hunting skills (we’re roughly two months away from the start of the big season; maybe she can help pay the mortgage around here with a few finds). The same trainer promises to curb her habit of excitedly nipping at my hands, heels and other extremities at play time.

My sandals are trashed.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

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Have a nice weekend, everyone. I’ll see you here on Monday.

Today's read

$3 billion valuation. Eyeglasses startup Warby Parker nearly doubled its valuation after bagging a  new funding round headed by D1 Capital, Durable Capital Partners, T. Rowe Price, and Baillie Gifford. Not bad considering the retailer was hard hit by the pandemic.

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Market candy

Quote of the day

“This might be the weirdest market I’ve ever seen.”

That's Jason Goepfert, president of Sundial Capital Research Inc., writing in an investor note earlier this week. The weirdness comes courtesy of a spiking VIX as the S&P 500 hits one new record after another. What's the VIX, and why should investors keep a close eye on it? Read on.