Last week, the market had mixed reactions to the inflation data. The Core Consumer Price Index (Core CPI) and Producer Price Index (PPI) for February exceeded expectations, registering at 0.4% and 0.6%, respectively, from the previous month. Over the past twelve months, Core CPI increased by 3.8%. The S&P 500 gained following Tuesday’s CPI data but sold off on Thursday after the hotter-than-expected PPI data, closing down -0.09% for the week.
The Federal Open Market Committee (FOMC) meets this week and is set to announce its interest rate decision on Wednesday. It is expected that the Fed will keep interest rates steady. This week is their first 2024 quarterly meeting, during which they will update their projected rate forecast from their so-called “Dot Plot.” The consensus from their last quarterly meeting in December pointed towards three rate cuts totaling 0.75% in 2024. Any changes to their forecasts will affect stock and bond prices. Additional rate cuts could mean gains for stocks and bonds, while fewer rate cuts could result in lower stock and bond prices.
Thank you for reading, and here’s to a great week ahead!
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