The minutes came after a cooler-than-expected inflation report, which contrasted with stronger underlying data and cemented the likelihood of another interest rate hike when the fed meet next month.
The main three US stock indices They ranged during the session, but closed with a loss. He S&P 500 lost 16.66 points (0.40%) to 4,092.28 points, while the Nasdaq Composite lost 100.75 points (-0.84%) to 11,931.13. And the Dow Jones Industrial Average fell 32.16 points (-0.10%), to 33,652.63.
“The minutes made it clear that the Federal Reserve remains concerned about the banking crisis and rising prices,” said Greg Bassuk, managing director of AXS Investments in New York.
Inflation data in the United States, a key element
The report, on the prices paid by urban consumers for a basket of goods and services, was placed below expectations from analysts, suggesting that the Federal Reserve’s efforts to contain inflation are having an effect.
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However, the core CPI – which excludes volatile food and energy products – remains well above the 2% annual average rate set as a target by the Federal Reserve.
“This week is a turning point as investors look for a stronger footing ahead of corporate results and the PPI (producer prices) report due tomorrow,” Bassuk said.
Consumer prices in the United States increased 0.1% monthly in March, just below the economists’ forecast of 0.2%, so that the annual inflation data would be located at 5%. The closely watched core CPI figure, which excludes food and energy, rose 0.4%, hitting the median estimate of 0.4%.
The report could affect the Fed’s rate decision in May. It can also build the case for stopping the central bank’s rate-hike regime.
What’s coming to the market
Analysts believe that the (economic) data has been very mixed, so investors are overreacting to any positive or negative indication of the policy of Federal Reserve rate hikes. The volatility will continue, investors will have to fasten their seatbelts,
Likewise, the financial markets have valued at 70% the probability of another 25 basis point interest rate hike following the Fed’s policy meeting next month.
The next catalyst for the market will likely be the first-quarter earnings season, which begins Friday with results from three big banks: Citigroup Inc, JPMorgan Chase & Co and Wells Fargo & Co.
Analysts now expect aggregate earnings for the first quarter of the S&P 500 fall by 5.2% year-on-year, which represents a marked change in trend compared to the annual growth of 1.4% registered at the beginning of the quarter.
Source: Ambito
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