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US inflation is slowing down, is it enough for a Fed's pause?

Published 13/04/2023, 11:52
NDX
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US500
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DJI
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Wall Street fell yesterday

Wednesday has been a negative day for the US stock market.

All three major US indexes reported losses.

The S&P 500 finished flat at -0.41%, the Nasdaq ended the trading session at -0.85% and the Dow Jones closed at -0.11%.

The investors' sentiment is Greed, as indicated in the graph below:

Sentiment indicator - Fear & Greed Index
Fear & Greed Index
The market sentiment is 63, in “Greed” mode in line with the last week's data.

US inflation is slowing down

Yesterday, the Bureau of Labor Statistics released the consumer price index for March.

The CPI report has shown inflation at 5% which is 1% less than the data registered last year when inflation was at 6%.

The latest CPI data is the at lowest level in almost two years.

The consumer price index has increased by 0.1% on a monthly basis, less than the 0.2% economists' forecasts.

The core CPI, the index that measures inflation excluding food and energy costs, was at 5.6% in March whit an increase of o.4% on monthly basis. Both data were in line with the economists' expectations.

The fact that the core CPI are still high, compared to the 2% Fed's target, makes more probable another interest rate hike in May.

According to the latest Fed meeting minutes, published yesterday, the majority of Fed officials are in favour of another rate increase this year before a pause.

What to watch today

The weekly initial jobless claims will be released today at 13:30 GMT by the US Labour Department.

It is forecasted that last week 232,000 benefits forms have been filled.

The US Producer Price Index (PPI) will also be published today at 13:30 GMT, important data to understand the inflation level.

The stock market could volatile today.

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