Despite consumer prices remaining more sticky than expected, analysts expect that the latest CPI reading will not have a major influence on the Federal Reserve’s monetary policy and the timing of its prospective interest rate cuts. “Things are really where they should be at this point,” Oppenheimer chief investment strategist John Stoltzfus commented, expressing an indifference toward the rise in consumer prices in February.

Both Stoltzfus and chief economist for Manulife Frances Donald agreed that June appears to be a sound time for the U.S. central bank to introduce interest rate cuts. Still, expectations may be pushed back if economic data continues to show significant price increases.

The post Stubborn CPI Reading Unlikely to Affect Fed Rate Cuts appeared first on theprimarymarket.com.

Equities on the benchmark S&P 500 slipped by 0.3%, as did those listed on the tech-heavy Nasdaq Composite. Stocks listed on the Dow Jones Industrial Average were also down 0.3%. This comes after tech stocks declined on Friday.

Due on Tuesday, the Consumer Price Index is expected to shed more light on the trajectory of the Federal Reserve’s fiscal policy. Last week, Fed Chair Jerome Powell expressed during his testimony before Congress that the central bank is looking for confident signs that inflation is cooling before introducing the prospect of interest rate cuts.

The post U.S. Stocks Cool Amid Investor Anxiety Over CPI appeared first on theprimarymarket.com.

In terms of long-run inflation, consumers expect a 2.8% reading, down from 3.2% during the previous report which was the highest level since 2011. The overall consumer sentiment index gained 13% in December; a reversal of four straight months of decline. The index was at 69.4, surpassing November’s 59.8 reading.

While the Consumer Price Index showed that consumer prices remained unchanged from October, the Personal Consumer Expenditures (PCE) index, which is the Federal Reserve’s preferred inflation gauge, showed prices increasing at their slowest pace in over two years. “While the lower inflation readings of the past few months are welcome, that progress must continue if we are to reach our 2% objective,” Fed Chair Jerome Powell stated in a speech on December 1.

The post Inflation Expectations Sink to Lowest Level in Two Years appeared first on theprimarymarket.com.

Consumer spending from July to September rose at an annual rate of 3.6%, with private investment surging by 10.5% annually while housing investment saw a 6.2% rise on a yearly basis, thereby defying a steep rise in mortgage rates. The economy was also bolstered by companies boosting their inventories in anticipation of rising sales.

Despite this positive economic growth, the Organization for Economic Cooperation and Development forecasted that the U.S. economy will grow by just 1.5% in 2024, down from the 2.4% expansion in 2023. This is particularly unexpected given that 2023 saw the Federal Reserve extend its steep interest rate rises, marking 11 increases since March 2022.

The post U.S. GDP Growth Hits 5.2% in Third Quarter appeared first on theprimarymarket.com.

Economists are expecting October’s PCE report to show a 3.5% rise in “core” inflation, which excludes volatile food and energy costs. Importantly, Thursday’s PCE report is expected to show whether or not the US economy may be headed for a “soft landing”, whereby inflation falls to the central bank’s 2% target without severe economic repercussions.

A slew of corporate earnings reports are also expected later this week, with Dollar Tree, Foot Locker, Kroger, Okta, Salesforce, Snowflake, and Ulta Beauty expected to release their financial results.

The post Investors Shift Focus to Upcoming Inflation Reports appeared first on theprimarymarket.com.

Markets are expecting the CPI report to show a headline inflation of 3.3% on an annual basis, down from September’s 3.7%. On a monthly basis, prices are expected to have increased by 0.1%, slower than September’s 0.4% rise. Core inflation, which excludes volatile food and gas costs, is expected to have increased by 4.1% over the last year, while on a monthly basis, a 0.3% increase is expected.

Although inflation shows continued signs of cooling, the Federal Reserve is not expected to lower rates. “Subdued increase in October’s headline CPI is likely to be overshadowed by another firm reading in the core,” Wells Fargo observed in a note. Although inflation remains above the Fed’s 2% target, an interest rate hike in December is also not expected.

The post Lower Inflation Expected in October CPI Report appeared first on theprimarymarket.com.

The year-over-year rise marginally exceeded analysts’ expectations of a 0.3% monthly rise and a 3.6% yearly increase. On a “core” basis, which excludes volatile items including food and gas, rose 4.1% from the last year as well as 0.3% on a monthly basis. This is a slowdown from August’s 4.3% yearly rise.

Viewing the Federal Reserve’s next moves, economists at Capital Economics observed that, “overall, there is nothing here that will convince Fed officials to hike rates at the next FOMC meeting. We continue to expect a more rapid decline in inflation and weaker economic growth to result in rates being cut much more aggressively next year than markets are pricing in.”

The post Consumer Prices Rise 3.7%, Exceeding Forecasts appeared first on theprimarymarket.com.

Core PCE, which excludes volatile food and energy categories, rose 3.9% on a monthly basis, down from July’s 4.1% rise and fall in line with expectations of economists surveyed by Bloomberg. Given that PCE is the Federal Reserve’s preferred measure of inflation, these cooling figures are good news given that they could give the Fed reason to ease its tight fiscal policy.

Interest rates are currently in the range of 5.25% to 5.5%; their highest level since March 2001. After Fed Chair Jerome Powell noted last Wednesday that inflation is still “well above our longer-run goal of 2%,” observers have braced themselves to face the Fed’s promise of keeping interest rates higher for longer.

The post Fed’s Preferred Inflation Measures Shows Slowest Rise in Two Years appeared first on theprimarymarket.com.

Although economists believe that inflation and economic data continue to move in the Federal Reserve’s favor as it seeks to loosen its interest rate policy, this development is raising market bets that the central bank will need to raise interest rates at least once more before the end of the year, potentially in its September meeting.

Pantheon Chief Economist Ian Shepherdson explained that while fluctuating inflation data can be expected going forward, underlying consumer inflation is expected to fall to less than 3% by the end of the year. “We expect the Fed to remain on hold but to signal willingness to hike again depending on the data,” Shepherdson explained.

The post Federal Reserve Experiences Setback in Bid to End Rate Hikes appeared first on theprimarymarket.com.

Core prices, which exclude volatile food and gas costs, rose by 4.3% in August compared to the previous year, marking a slowdown from the 4.7% annual rise experienced in July. On a monthly basis, core prices rose 0.3%, outpacing July’s 0.2% rise.

Oil prices also embarked on a rampant rise, with U.S. benchmark West Texas Intermediate jumping to a price just below $89 per barrel. Brent crude futures were priced at over $92 per barrel; its highest level since November 2022. Like consumer prices, oil was also driven upwards by the rise in energy costs.

The post Inflation and Oil Embark on Simultaneous Surge appeared first on theprimarymarket.com.

Despite consumer prices remaining more sticky than expected, analysts expect that the latest CPI reading will not have a major influence on the Federal Reserve’s monetary policy and the timing of its prospective interest rate cuts. “Things are really where they should be at this point,” Oppenheimer chief investment strategist John Stoltzfus commented, expressing an indifference toward the rise in consumer prices in February.

Both Stoltzfus and chief economist for Manulife Frances Donald agreed that June appears to be a sound time for the U.S. central bank to introduce interest rate cuts. Still, expectations may be pushed back if economic data continues to show significant price increases.

The post Stubborn CPI Reading Unlikely to Affect Fed Rate Cuts appeared first on theprimarymarket.com.

Equities on the benchmark S&P 500 slipped by 0.3%, as did those listed on the tech-heavy Nasdaq Composite. Stocks listed on the Dow Jones Industrial Average were also down 0.3%. This comes after tech stocks declined on Friday.

Due on Tuesday, the Consumer Price Index is expected to shed more light on the trajectory of the Federal Reserve’s fiscal policy. Last week, Fed Chair Jerome Powell expressed during his testimony before Congress that the central bank is looking for confident signs that inflation is cooling before introducing the prospect of interest rate cuts.

The post U.S. Stocks Cool Amid Investor Anxiety Over CPI appeared first on theprimarymarket.com.

In terms of long-run inflation, consumers expect a 2.8% reading, down from 3.2% during the previous report which was the highest level since 2011. The overall consumer sentiment index gained 13% in December; a reversal of four straight months of decline. The index was at 69.4, surpassing November’s 59.8 reading.

While the Consumer Price Index showed that consumer prices remained unchanged from October, the Personal Consumer Expenditures (PCE) index, which is the Federal Reserve’s preferred inflation gauge, showed prices increasing at their slowest pace in over two years. “While the lower inflation readings of the past few months are welcome, that progress must continue if we are to reach our 2% objective,” Fed Chair Jerome Powell stated in a speech on December 1.

The post Inflation Expectations Sink to Lowest Level in Two Years appeared first on theprimarymarket.com.

Consumer spending from July to September rose at an annual rate of 3.6%, with private investment surging by 10.5% annually while housing investment saw a 6.2% rise on a yearly basis, thereby defying a steep rise in mortgage rates. The economy was also bolstered by companies boosting their inventories in anticipation of rising sales.

Despite this positive economic growth, the Organization for Economic Cooperation and Development forecasted that the U.S. economy will grow by just 1.5% in 2024, down from the 2.4% expansion in 2023. This is particularly unexpected given that 2023 saw the Federal Reserve extend its steep interest rate rises, marking 11 increases since March 2022.

The post U.S. GDP Growth Hits 5.2% in Third Quarter appeared first on theprimarymarket.com.

Economists are expecting October’s PCE report to show a 3.5% rise in “core” inflation, which excludes volatile food and energy costs. Importantly, Thursday’s PCE report is expected to show whether or not the US economy may be headed for a “soft landing”, whereby inflation falls to the central bank’s 2% target without severe economic repercussions.

A slew of corporate earnings reports are also expected later this week, with Dollar Tree, Foot Locker, Kroger, Okta, Salesforce, Snowflake, and Ulta Beauty expected to release their financial results.

The post Investors Shift Focus to Upcoming Inflation Reports appeared first on theprimarymarket.com.

Markets are expecting the CPI report to show a headline inflation of 3.3% on an annual basis, down from September’s 3.7%. On a monthly basis, prices are expected to have increased by 0.1%, slower than September’s 0.4% rise. Core inflation, which excludes volatile food and gas costs, is expected to have increased by 4.1% over the last year, while on a monthly basis, a 0.3% increase is expected.

Although inflation shows continued signs of cooling, the Federal Reserve is not expected to lower rates. “Subdued increase in October’s headline CPI is likely to be overshadowed by another firm reading in the core,” Wells Fargo observed in a note. Although inflation remains above the Fed’s 2% target, an interest rate hike in December is also not expected.

The post Lower Inflation Expected in October CPI Report appeared first on theprimarymarket.com.

The year-over-year rise marginally exceeded analysts’ expectations of a 0.3% monthly rise and a 3.6% yearly increase. On a “core” basis, which excludes volatile items including food and gas, rose 4.1% from the last year as well as 0.3% on a monthly basis. This is a slowdown from August’s 4.3% yearly rise.

Viewing the Federal Reserve’s next moves, economists at Capital Economics observed that, “overall, there is nothing here that will convince Fed officials to hike rates at the next FOMC meeting. We continue to expect a more rapid decline in inflation and weaker economic growth to result in rates being cut much more aggressively next year than markets are pricing in.”

The post Consumer Prices Rise 3.7%, Exceeding Forecasts appeared first on theprimarymarket.com.

Core PCE, which excludes volatile food and energy categories, rose 3.9% on a monthly basis, down from July’s 4.1% rise and fall in line with expectations of economists surveyed by Bloomberg. Given that PCE is the Federal Reserve’s preferred measure of inflation, these cooling figures are good news given that they could give the Fed reason to ease its tight fiscal policy.

Interest rates are currently in the range of 5.25% to 5.5%; their highest level since March 2001. After Fed Chair Jerome Powell noted last Wednesday that inflation is still “well above our longer-run goal of 2%,” observers have braced themselves to face the Fed’s promise of keeping interest rates higher for longer.

The post Fed’s Preferred Inflation Measures Shows Slowest Rise in Two Years appeared first on theprimarymarket.com.

Although economists believe that inflation and economic data continue to move in the Federal Reserve’s favor as it seeks to loosen its interest rate policy, this development is raising market bets that the central bank will need to raise interest rates at least once more before the end of the year, potentially in its September meeting.

Pantheon Chief Economist Ian Shepherdson explained that while fluctuating inflation data can be expected going forward, underlying consumer inflation is expected to fall to less than 3% by the end of the year. “We expect the Fed to remain on hold but to signal willingness to hike again depending on the data,” Shepherdson explained.

The post Federal Reserve Experiences Setback in Bid to End Rate Hikes appeared first on theprimarymarket.com.

Core prices, which exclude volatile food and gas costs, rose by 4.3% in August compared to the previous year, marking a slowdown from the 4.7% annual rise experienced in July. On a monthly basis, core prices rose 0.3%, outpacing July’s 0.2% rise.

Oil prices also embarked on a rampant rise, with U.S. benchmark West Texas Intermediate jumping to a price just below $89 per barrel. Brent crude futures were priced at over $92 per barrel; its highest level since November 2022. Like consumer prices, oil was also driven upwards by the rise in energy costs.

The post Inflation and Oil Embark on Simultaneous Surge appeared first on theprimarymarket.com.