CPI Easing Fed Pause Rally
Positive Fed communication and contained inflation expectations will support equity market gains
Too little corroboration in the last 3 days to call a trend (5 articles). Watching for it to gain traction.
"The S&P 500 notched a record-high close on Aug 13, fuelled by advances in Sandisk and other heavyweight technology stocks, as tame producer price inflation data supported expectations the Federal Reserve will not raise interest rates at its September meeting."
"Stock indexes are moving higher today, with the S&P 500 posting a 1-month high following today's US economic news, which showed that June producer prices rose less than expected. New York Fed President John Williams said, 'Inflation is unquestionably too high, but there are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters.'"
"Stock indexes settled higher on Tuesday as bond yields fell on a better-than-expected US June CPI report. US Jun CPI eased to +3.5% y/y from +4.2% y/y in May, better than the +3.8% y/y expected."
"On Tuesday, the S&P 500 and Nasdaq gained ground as softer-than-expected inflation data suggested the Federal Reserve may reconsider aggressive interest rate hikes."
"He also said the positive tone struck by Fed Chair Kevin Warsh at the Sintra forum helped lift investor sentiment and supported U.S. equities. The equity market response was largely in response to this positive tone and sense of inflation possibly being contained."