Following Wednesday’s consumer price index (CPI) report, coming in at 0.5%, the highest level since August 2023, U.S. equity and fixed-income markets were hit hard by the news.1 However, the negative investor sentiment did not last long with the S&P 500 Index closing the week higher and 10-year Treasury yields moving below the 4.5% level.2 The rebound by week’s end was in part driven by better inflation data expected to come next week in the Federal Reserve’s (Fed) preferred inflation gauge, personal consumption expenditures (PCE).3 During his congressional testimony, Fed Chair Jay Powell suggested, “we’re not quite there” on inflation after the disappointing CPI release.4
With a relatively light week of economic data on tap, Wednesday’s release of the January Fed meeting minutes may offer investors more insight into the timing for another rate cut.5 In particular, the January minutes may provide more clues on how Fed officials might react to new policy initiatives under consideration by the Trump Administration.
Sources:
1Reuters – US consumer inflation increases at fastest pace in nearly 1-1/2 years in January; 2/12/25
2,3CNBC – S&P 500 closes little changed on Friday, but Wall Street notches weekly gains: Live updates; 2/14/25
4The Wall Street Journal – Stock Market News, Feb. 12, 2025: Dow, S&P 500 Fall After Inflation Hits 3%; 2/12/25
5MarketWatch – U.S. Economic Calendar; as of 2/18/25
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