ACTV - Consumers Aren't Buying The 'Official' Inflation Numbers
2024-05-13 06:57:54 ET
Summary
- Market direction in the coming week will hinge on CPI and PPI reports, with investors hoping to see progress on the inflation front, triggering a potential Fed Funds rate cut.
- However, consumer sentiment shows increasing skepticism towards 'official' government inflation readings, with inflation expectations rising in the latest consumer survey this week.
- How the weakening consumer is impacting many members of the S&P 500 and why Stagflation is becoming an increasing possibility is presented in the paragraphs below.
Market direction in the coming week is likely to be determined in a large part by the monthly CPI and PPI reports that come out mid-week. Investors are hoping to see some progress on the inflation front, which would increase the chances of the central bank finally making a much-anticipated cut to the Fed Funds rate, something that has been delayed consistently throughout 2024 (we began the year with futures projecting 6-7 25bps cuts to this rate). Investors might get what they wish for on the CPI front, as the shelter component (about 36% of the reading) should be accommodative ....
Consumers Aren't Buying The 'Official' Inflation Numbers