Wall Street Investors to pore over inflation data for signals on rate trajectory
Investors will zero in on inflation data this week that they say could determine whether the US Federal Reserve hikes interest rates later in the month. After dropping on Friday, the benchmark S&P 50...
Investors will closely examine upcoming inflation data to gauge the potential trajectory of the U.S. Federal Reserve's interest rate hikes later in the month. The S&P 500, which ended the week with a modest gain and near a mid-August record high, experienced volatility due to shifting expectations on rate paths and concerns over rising Treasury yields impacting Wall Street's rally.
Market participants have been focused on the possibility of a Fed rate increase at their September 15-16 meeting, following remarks by Fed Chairman Kevin Warsh. The closely-watched monthly Consumer Price Index (CPI) report on September 11 will be crucial for investors, as it could signal whether the Federal Reserve needs to act on inflation.
Prior to the CPI data, Thursday's Producer Price Index report will provide an early glimpse of August's inflation trends. Economists predict a 0.4% monthly increase in August CPI and a 0.2% rise in the core measure. The likelihood of an interest rate hike has fluctuated, falling to 57% on Thursday following comments from Fed Governor Christopher Waller, but rose again on Friday due to strong employment data.
Analysts suggest that the employment report marginally supports the case for a quarter-percentage-point hike at the September meeting, shifting focus to the upcoming inflation data.
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