.jpg "Key Inflation Data Arriving After a Volatile Week Photo")
With more important inflation data set to be released this week, investors may need to brace for additional market volatility. The VIX Index, the equity market’s “fear gauge,” surged last Monday to the highest level since the onset of the pandemic in March 2020.1 The equity market freefall and sharp decline in Treasury yields led some market experts to call for an emergency Federal Reserve (Fed) rate cut to help restore market stability. The Fed’s decision not to react to the market volatility was validated by week’s end as the S&P 500 Index recovered, finishing almost unchanged on the week.2
With the Producer Price Index (PPI) out Tuesday, followed by the Consumer Price Index (CPI) on Wednesday, Fed policymakers will be looking for more proof inflation is moving toward its 2% goal.3 Key data on the health of the U.S. economy growth will also be released this week, with Retail Sales and Industrial Production out on Thursday and the University of Michigan Consumer Sentiment Index on Friday.4
Sources:
1CNBC – Wall Street’s ‘fear gauge’ — the VIX — hits highest level since the pandemic market plunge in 2020; 8/5/24
2CNBC – Stocks close higher, clawing back much of the week’s losses in major recovery from Monday’s sell-off: Live updates; 8/9/24
3,4MarketWatch – U.S. Economic Calendar; as of 8/12/24
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