![]() If the last bit to get inflation down to the Fed’s target of 2% is as tough as some economists expect, that could make things dicier than a swiftly rising stock market seems to suggest.īig U.S. Hikes to interest rates also take a notoriously long time to take effect, and the Fed’s past increases are likely still making their way through the system. “The Fed may leave interest rates unchanged next month, but they’re not about to start cutting them,” Loewengart said. That could mean the cuts to interest rates that investors really desire may be further off than hoped. The weekly data on unemployment claims, though, have given head fakes in the past about the trajectory of the job market, said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office. Such hopes helped the S&P 500 rally a big 19.5% through the first seven months of the year, though critics say Wall Street too quickly latched onto a belief that inflation is continuing to cool, the economy will avoid a recession and the Fed has already hiked rates for the final time this cycle.įed officials would likely welcome some softening of the job market, which they would see as removing upward pressure on inflation. ![]() High rates undercut inflation by slowing the entire economy and hurting investment prices, which raise the risk of a recession. The readings bolstered hopes among investors that the Federal Reserve’s campaign to grind down inflation is progressing and that maybe it could even be done hiking interest rates. Beneath the surface, underlying trends for inflation were also within expectations. That’s a touch milder than the 3.3% inflation rate economists expected to see and down sharply from last summer’s peak above 9%. consumers paid prices that were 3.2% higher in July than a year earlier. Thursday’s highly anticipated report showed U.S. ![]() Eastern time, and the Nasdaq composite was 1% higher. ![]() The Dow Jones Industrial Average was up 281 points, or 0.8%, at 35,405, as of 10:45 a.m. The S&P 500 was 0.8% higher in morning trading and on track for just its second winning day in the last eight. NEW YORK – Stocks are rising Thursday as Wall Street lets out a bit of an exhale following the latest update on inflation across the U.S. ![]()
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