Today the Dow Jones Industrial Average jumped today by 528.58 points or 1.58% which is a significant change for an industrial average in just a day. This jump is partly due to the anticipation of CPI data that is set to release on December 13th, 8:30 AM. The Core CPI is expected to edge lower to 6.1% from 6.3% -
Yung-Yu Ma, BMO Wealth Management chief investment strategist. “There’s probably some cautious optimism ahead of tomorrow’s CPI report, but also some underlying concern" The Dow has had a bearish outlook in the past weeks and this gives some hope to the economic future.
The goal of the Fed recently has been to decrease inflation and are doing so with their Fed rate hikes and the accumulation of quantitative tightening. So the optimism comes from the Fed released data from the CPI to support their efforts of decreasing inflation. In my own belief we are not going to see the effects of the rate hikes and quantitative tightening until 2023 which I believe will be a recessionary year.
https://www.cnbc.com/2022/12/11/stock-market-news-futures-open-to-close-live-updates.html
very interesting to see the Dow jump up like this after a period of slowing down, how might the Fed's efforts to decrease inflation through rate hikes and quantitative tightening affect the economy in the short and long term?
ReplyDeleteWhat was the main cause of the change in the CPI?
ReplyDeleteThis increase was definitely promising; however, it was not sustained. The Fed has increased interest rates using struggling stocks as evidence.
ReplyDelete