As the Consumer Price Index (CPI) data fell mostly in line with expectations for the month of April, it may signal to traders that inflation is beginning to moderate, potentially allowing the Federal Reserve to lower interest rates. According to CME FedWatch, over 50% of traders are pricing in a rate cut in September.
Northwestern Mutual Wealth Management Chief Portfolio Manager Matt Stucky joins The Morning Brief to discuss how this recent inflation data could allow for a rate cut.
Stucky details the market's reaction after the CPI reading was released: "This is a pretty clear indication that the market's reacting to this is an across-the-board soft print as you look at both the CPI print as well as the retail sales. And really the clearest way you can look at that is the September rate cut odds. Going into today, you kind of have the market pricing in one cut, maybe a small percentage chance of a second rate cut. But now we're kind of pricing in two cuts now. And that has implications for markets."
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14 май 2024
