Friends
The CPI number came in as expected with a reading of inflation at the retail level at 4% year over year. By that measure inflation has been more than cut in half over the last 12 months so who could blame Fed Chair Powell if he takes a victory lap during tomorrow’s press conference after the release of the Fed decision. Also, at least up until this point, the Fed hasn’t wrecked the labor market which most thought they would have to do to bring inflation down. Yes, a few banks were broken along the way and a problematic commercial real estate market may develop in future months but for the moment the Fed has to feel like they have gotten away with murder.
Stocks liked the CPI number and by the close the Dow Jones Industrial Average was up 145 points to finish the day at 34,212. The S&P 500 was up 30 points to close at 4,369. The Nasdaq Composite Index was up 111 points to close at 13,573. Gold was down $13 to trade at $1,956 per ounce, while oil was up $2.06 to trade at $69.18 per barrel WTI.
The markets expect the Fed to pause tomorrow (no interest rate hike) but indicate in their statement that future hikes might still be necessary if inflation doesn’t continue to move lower towards their 2% target. The Fed Chair’s press conference should be interesting. Stay tuned.
Have a nice evening everyone.
