Stocks Rise Ahead of Inflation Data
Investors are anticipating a 0.5 percentage-point-interest-rate increase, with odds at 77%, this week.
Investors are keen to see updated forecasts in the Fed’s latest Summary of Economic Projections, due Wednesday.
Tweet on Inflation expectation by Investors
Inflation expectations are falling, according to the latest New York Fed Survey of Consumer Expectations!
CPI is growing more confident about the job prospects, with expectations of higher unemployment one year from now ticking lower.#inflation #ConsumerSpending #CPI pic.twitter.com/DWuB75Xz3m
— The_Journalbiz (@the_journalbiz) December 12, 2022
CPI New York FED Survey
“Our overall base case is that the FOMC will remain focused on inflation and continue to strike a hawkish tone,” said Piper Sandler’s Roberto Perli and Benson Durham in a Monday note.
Traders see the federal-funds rate touching as high as 4.96% in June—a long way from peak expectations of 5.22% months ago.
To be sure, weaker-than-expected inflation or hints of dovishness from Mr. Powell could fuel a market rally: November’s cool CPI print led to both stocks and bonds surging.
*Economists surveyed by the WSJ expect 6.3% annualized core inflation. The options market is implying strong stock-market moves
