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Fed's preferred inflation gauge cools slightly in January after heated data this month

1. Inflation eased slightly to 2.5%, aligning with forecasts. 2. Fed Chair Powell indicated no imminent rate cuts, maintaining restrictive policy. 3. Tech stocks fell significantly due to tariff threats and inflation concerns. 4. Majority expect Fed to keep interest rates unchanged amid inflation fears. 5. S&P 500 decreased by 2.5% this week prior to the inflation report.

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FAQ

Why Bearish?

Expectations for stable interest rates under strict inflation may dampen investor enthusiasm. Historical examples, like the 2018 rate hike concerns, have often led to market corrections.

How important is it?

The report highlights critical economic indicators affecting future Federal Reserve policies, influencing market sentiment.

Why Short Term?

Immediate effects are likely as traders react to inflation and tariff news. Recent examples show swift market reactions to similar inflation announcements.

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