Wall Street: Earnings on the back of inflation and the Federal Reserve

Indices on Wall Street closed higher as investors were optimistic about inflation, which posted the smallest increase in the past two years.

“New inflation data showing a slowdown makes the Fed likely not to raise interest rates tomorrow. The US central bank’s tactic seems to be to press a ‘pause’ on interest rate increases in order to monitor the economy’s trajectory.” Cargi Chaudhuri comments on CNBCPresident of the Americas.

It is reported that the Fed’s interest rate decision will be announced tomorrow, as most analysts expect it to remain unchanged.

the Dow Jones It traded 145 pips higher, or 0,43%closing at 21,212 O units Standard & Poor’s 500 hiking 0,69% at 4369 units and or Nasdaq rose 0,83%at 13,573 points, with the two stock indices reaching new highs in the past 13 months, i.e. since April 2022

Turning to today’s economic news, US consumer prices rose modestly in May, resulting in the smallest annual increase from inflation For more than two years, though, underlying price pressures have remained strong.

Consumer Price Index (CPI) rose by 0.1% Last month with lower gasoline prices, the Labor Department said on Tuesday. The Consumer Price Index rose 0.4% in April. In the 12 months through April, the CPI rose 4,0%. This was the smallest annual increase From March 2021 Followed by a 4.9% increase in April.

The annual consumer price index has peaked by 9.1% in June 2022, which was the largest increase since November 1981, and is declining as last year’s large increases are taken into account. economists surveyed Reuters They had expected the consumer price index to rise 0.2% last month and 4.1% on an annual basis.

Economists believe that a gradual slowdown in inflation and the labor market gives the US central bank enough room to skip raising interest rates on Wednesday for the first time since March 2022, when η Fed It launched the fastest monetary tightening in more than 40 years.

The Fed, which raised its key interest rate by 500 basis points, is expected to leave the door open for further rate hikes.

With the economy showing signs of a slowdown, economists say the Fed should hold off on further rate hikes while assessing the impact of the measures it has taken so far to “freeze” demand. the Slowing headline inflationi, thanks to the cost of energy and food. Prices of basic food products have returned to the observed levels before the Russian invasion in Ukraine.

However, inflation is proving persistent except for these volatile categories and remains well above the Fed’s 2% target. The so-called core CPI rose 0.4% in May, up by the same margin for the third month in a row.

Rising rents continued to put upward pressure on the core CPI, while used cars Trucks also gave a boost. The rise in used cars and trucks reflects the delayed impact of increases during the winter and early spring.

First published date: Tuesday, June 13, 2023 at 21:00