Economists consulted by Reuters estimated that the CPI would rise 0.4% in December and 7.0% year-on-year.
“Investors were bracing for even higher inflation than we actually saw. As bad as the number is and as inflationary pressure is on the economy, there was a little lightening in that,” said Anthony Saglimbene, strategist at Ameriprise Financial in Troy, Michigan. “Today’s inflation report validates the Fed’s track record and means they don’t have to be more aggressive than is already discounted.”
The Fed’s plan to reduce monetary expansion to combat inflation includes raising interest rates, which analysts expect to begin in March, as well as reducing its bond purchase program and cutting its asset holdings.
For most equity sectors, it also helped that longer-term Treasury yields fell on Wednesday. In recent weeks, strong gains in 10-year debt returns weighed on equities, particularly in rate-sensitive growth sectors such as technology.
According to preliminary data, the S&P 500 gained 12.70 points, or 0.27%, to 4,725.77 units, while the Nasdaq Composite added 34.27 points, or 0.23%, to 15,187.72 units. The Dow Jones Industrial Average rose 44.59 points, or 0.12%, to 36,296.61 units..
Growth and technology stocks have been making a rally this week, with investors looking at a variety of metrics to decide whether to buy the advance or prepare for further declines.
Source From: Ambito
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