Mixed market reactions to Federal Reserve actions, inflation still above target, rate cut expected in September.

From Investing.com: 2024-07-12 07:55:00

Yesterday, the market saw mixed reactions as some stocks gained over 1% while others faced selling pressure due to concerns over Federal Reserve actions. The dollar lost some ground but settled at 104.31 later in the trading session, with bond yields, particularly the , declining due to softer numbers. Traders are now 80% certain of a rate cut in September following a decrease in CPI to 3% from 3.3%. The key question remains: why are traders betting on a rate cut with inflation still above the Fed’s 2% target?

Shelter prices, accounting for about 36% of the CPI, have shown declines along with decreases in medical and transportation services. Service inflation, a persistent challenge, is slowly being suppressed, as seen with significant declines in new rental contracts. Although inflation remains at 3%, progress is being made in major CPI components, moving the Federal Reserve closer to its inflation goal. The path forward may be complex, but signs of progress are evident.



Read more at Investing.com: Is the Federal Reserve on Track for its 2% Inflation Goal?