(Bloomberg) — Wall Street traders fearing another disappointing inflation report got a degree of relief after the Federal Reserve’s favored price gauge was on spot with estimates.
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Stocks and bonds rose as the core personal consumption expenditures gauge added to bets the central bank will be able to lower rates this year. That’s after a jump in consumer and producer prices made traders pare their Fed-cut wagers. While the PCE is still above the central bank’s 2% target — giving credence to Fed’s wait-and-see approach — the data helped allay concerns about a more significant rise in prices.
“This morning’s data didn’t come in hotter than expected and is a sigh of relief for bulls, who were worried inflation was going to reaccelerate and cause the Fed to put off rate hikes for a much longer time, or even worse, begin raising rates again,” said Chris Zaccarelli at Independent Advisor…
