Nasdaq slide leads stocks lower with earnings, Bessent confirmation hearing in focus
Stocks rose Wednesday after the December CPI print core inflation finally showed some easing and investors adjusted bets on a Fed rate cut.
But the risk of sticky prices still exists mode change In Washington, D.C., when President-elect Donald Trump takes office next week, economists generally agree that the battle to contain inflation is far from over.
“It hasn’t been stable on inflation,” Claudia Sahm, chief economist at New Century Advisors and a former Federal Reserve economist, told Yahoo Finance. Morning brief the program. “It’s been pretty uneven.”
Although inflation has slowed, it has remained high The Federal Reserve’s 2% target on an annual basis. Higher shelter costs and essential services such as health care and insurance have contributed to stubborn readings in recent months as consumers simultaneously feel the contraction. in grocery stores and: also at the pump.
“I don’t think we’re completely out of the woods here,” Ed Yardeni, president of Yardeni Research, told Yahoo Finance. Market dominance Overtime. “We must remember that by 2023 deflationary trends were recorded. And then we got into 2024 and saw a bit of a reversal of that.”
Rising wages and a strong labor market have somewhat offset recent price pressures, but underlying trends have shown continued stickiness in categories that most households rely on.That makes the Fed work even harder to get out.
“It’s a bit of a no-no to get some bad news,” Sahm said, referring to the slowdown in December shelter inflation. But “it’s not really a game-changer. It’s much more than what we’ve seen on a monthly basis.” mixed with”.
And volatility is likely to rise when Trump takes office on Monday.
Trump’s proposed policies, such as higher tariffs on imported goods, tax cuts for corporations and curbs on immigration, are seen as inflationary. And that policy can make it more complicated Central bank progress for interest rates.
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