The latest inflation report out Wednesday morning is raising concerns, as the US Bureau of Labor Statistics' (BLS) Consumer Price Index (CPI) saw inflation rise by 0.5% month-over-month and 3.0% year-over-year, above economist forecasts.
The uptick is sparking discussions about the Federal Reserve’s next moves and what it might mean for the markets. New Century Advisors chief economist Claudia Sahm and UBS Global Wealth Management Head of Taxable Fixed Income Strategy Leslie Falconio join Morning Brief to weigh in on what the economic data could mean for the Federal Reserve's next move.
"There's no sugarcoating this. This is not a good print," Sahm, Federal Reserve Board economist and the creator of the central bank's Sahm Rule recession indicator, says. "The one thing to say is this is a familiar disappointment. We have seen January effects that have been... upside surprises, hotter prints at the beginning of the year."
Falconio adds that such data points don't drastically change the market outlook (ES=F, NQ=F, YM=F), echoing Sahm's sentiments by noting that "one number doesn’t necessarily alter the path."
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Both experts agree the Fed will likely remain cautious and data-dependent, with a focus on longer-term trends rather than reacting to a single report.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
This post was written by Josh Lynch