VYMI - The Waiting Game: Markets Anxious For Clarity From The Fed

2024-02-22 12:30:00 ET

Summary

• Both US Consumer Price Index and US Producer Price Index data for January were hotter than expected, but it was no cause for concern, in my opinion.
• The most recent gross domestic product prints for Japan and the UK show that both economies were technically in recession in the back half of 2023.
• Recent volatility among US small-cap stocks underscores market confusion and uncertainty about when the Fed will begin cutting rates and by how much.

Last week was a busy one for data and markets. Hotter-than-expected US inflation data roiled markets, signs of economic slowdown became clearer, and uncertainty about the path ahead for US Federal Reserve (Fed) rate cuts has had particular impact on small-cap stocks. Here are my key takeaways from what we learned last week.

Disinflation continues in Western developed economies , imperfectly

Both US Consumer Price Index ((CPI)) and US Producer Price Index ((PPI)) for January were hotter than expected, but it was no cause for concern, in my opinion.

This CPI print in particular was a source of great market concern, as evidenced by the stock market sell-off that occurred that day....

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