After another week of gains, US equities ended the week with a mixed closing as a major inflation data suggested more cooling.
The primary inflation indicator used by the Federal Reserve, the personal consumption price index, increased 2.6% year over year in November. This was less than the 2.8% gain that was predicted and marked a decline from the 3% rate of the previous month. Prices decreased by 0.1% on a monthly basis, which is the first decrease since April 2020.
Additionally, the main indices saw their seventh weekly gain. Since late October, the market has been rising on expectations that the Fed would loosen monetary policy in 2024 as evidence of inflation approaching the 2% objective increases.
The figures now show disinflation, which is really good for the market and the economy. According to a statement from Jamie Cox, managing partner of Harris Financial Group, “the Federal Reserve is very likely to begin cutting rates in March.”
The annual Santa Claus surge may push markets to all-time highs next week. Due to the Christmas break, markets will be closed on Monday and reopen on Tuesday.