The latest CPI report gave investors hope that inflation is now past its peak, lending confidence that the Federal Reserve’s interest rate hikes are slowly working to tame high price increases. Stock futures rallied on the news. “This confirms the Fed’s own view they need more measured rate hikes now but this doesn’t stop them,” said Diane Swonk, chief economist at KPMG. ” It just affirms their plan.” Swonk added that, from the Fed’s perspective, the dip in inflation is welcome news but still not enough to stop further tightening. In November, the Fed raised rates by a another 75 basis points, its fourth consecutive three-quarter point increase, putting rates at their highest level since 2008.
Source: CNBC – Bonds
