US inflation report ‘absolutely important’ for future Fed policy
The Federal Reserve raised interest rates again last week. Powell suggested the quarterly percentage point hike could be the last one. But policymakers warned at their June and July meetings that they were ready to raise borrowing costs again. That will depend on economic indicators in the coming weeks.
On Wednesday, the Bureau of Labor Statistics released April’s consumer price index and The reading is “absolutely important,” in the words of JP Morgan asset manager Karen Ward. The cost of shelter will be one of the key indicators if inflation is shown to be subdued. The Federal Reserve could have more maneuverability to “reprioritize.” But if inflation, especially labor costs, are “sticky”, The Federal Reserve will be “stuck.”
The Federal Reserve is trying to cut inflation to its 2% target, but it’s now more than double that pace. Ward said moderately high inflation wouldn’t necessarily be bad for stocks. With continued strong economic growth, like last week’s Goldilocks jobs report, this It may help with broader performance in the stock market.