The stock market (^DJI, ^IXIC, ^GSPC) was hit with a bit of a sell-off on Tuesday as January inflation data came in hotter than expected. While the market hit one of its worst days since March 2023, Wednesday trading has seen some recovery as stocks bounce back. The Federal Reserve is in focus as Wall Street speculates whether or not this economic print will fuel officials’ sentiments to push interest rate cuts farther along into 2024.
Morningstar Chief US Market Strategist David Sekera joins Yahoo Finance to discuss the current market environment and how the Fed may react to recent inflation data.
We don’t think it’s nearly as bad as the headlines suggested so when our US economics team really got into it and started looking at the differences between some of the weightings and methodologies in CPI versus PCE, we still continue to believe that PCE this year is going to average 1.9% and actually will even subside even further going into 2025,” Sekara puts the CPI print into context. “So, we’re not concerned about inflation. Our US economics team actually is still looking for that first rate cut here in May, so I know that’s a little out of consensus right now…”
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