Two fresh inflation measurements in January show prices have risen more than Wall Street had expected, but economists have found positive news about the market and the Federal Reserve details.
Evaluating categories from both the consumer price index (CPI) and the producer price index (PPI) that feeds the Fed’s preferred inflation gauge, the Personal Consumption Expense (PCE) index could potentially increase in prices in January claims it is high.
Inflation Insights President Omea Sharif told Yahoo Finance that the PPI release on Thursday morning brought “good news” to the Fed’s fight against inflation after CPI data shook the market on Wednesday. Sharif estimates that “core” PCEs, which excludes food and energy from the volatile category, are likely to show prices up 2.6% in January from 2.8% seen in December.
“We’re just keeping our path creeping towards the 2% Fed target,” Sharif said.
Following the release of PPI, the 10-year Treasury yield slid nearly 10 basis points, eliminating the move from the day before the stock weighed in during Wednesday’s trading session. All three major indices increased with lower yields moving, with Nasdaq composites (^ixic) increasing by more than 1%.
The Federal Reserve has steadily held interest rates by the end of July after its release. Investors are currently down from the 58% chance that the Fed will not cut interest rates at its July meeting. CME FedWatch tool by the entire.
