Last Minutes – CPI Inflation Report
Ahead of the CPI inflation report, the Fed minutes were released to the public, giving us more context into what they are thinking about. In what has been a trend, all the Fed officials are in unison regarding the decision, and itโs not shocking at all. Most of them have penciled in large rate hikes for the next few meetings, and rates are almost destined to increase by 0.75% to settle in a range of 3.75 to 4%. Officials are still concerned about the persistence of high inflation in the economy, backing this upcoming decision.
What might be concerning for investors is that the inflation report might not matter to them at all. Fed Governor Christopher Waller said that the inflation report would likely not sway his and the Fedโs decision overall, but itโs deeper than that. If the inflation report ends up being negative, we can assume that a hardline stance will continue to be the trend. However, a positive inflation report will get them thinking, and we know this is the case. Waller said that the topic of raising rates too quickly will be a core discussion point, and itโs possible that opinions will change in some way. The labor market appears to be the biggest roadblock to a slowdown in rates, making future job reports very important. Powell and the Federal Reserve will have their eyes on the situation unraveling in the United Kingdom and their bond situation, along with the conflict in Ukraine.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.