Fed's Favorite Inflation Measure Holds At Nearly 3-Year Lows, Bolstering Market Rate Cut Bets
Portfolio Pulse from Piero Cingari
The U.S. PCE price index, the Fed's preferred inflation measure, remained at 2.6% in December, a near 3-year low. Core PCE also decelerated to 2.6%, suggesting potential for Fed rate cuts. Personal income and spending increased, with spending outpacing expectations. This data could influence the stock market and has bolstered rate cut bets, with SPY and QQQ seeking continued gains.
January 26, 2024 | 1:40 pm
News sentiment analysis
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POSITIVE IMPACT
QQQ, representing tech-heavy stocks, may benefit from the inflation data and rate cut expectations, potentially extending its positive streak.
The QQQ ETF, which includes many growth and tech stocks, may see a short-term positive impact as the inflation data suggests a less aggressive Fed, which is typically beneficial for growth stocks. The anticipation of rate cuts could further support this trend.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
SPY, tracking the S&P 500, may see continued gains as steady inflation and potential rate cuts could boost market sentiment.
The SPY ETF is likely to be positively impacted in the short term as steady inflation rates and the potential for rate cuts by the Fed are generally favorable for equity markets. This could enhance investor sentiment and drive the market higher.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80