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CPI inflation data report

April’s consumer price index report is expected to show inflation has already reached a peak — a development that some investors say could temporarily soothe markets.

But economists say, even with a reprieve in headline inflation, core inflation could gain on a monthly basis and stay elevated for months to come. Core inflation excludes food and energy costs.

The CPI report is expected to show headline inflation rose 0.2% in April, or 8.1% year-over-year, according to Dow Jones.

That compares with a whopping 1.2% increase in March, or an 8.5% gain year-over-year. The April data is expected at 8:30 a.m. ET Wednesday.

Core CPI is expected to rise 0.4% or 6% year-over-year. That compares with 0.3% in March, or 6.5% on an annualized basis.

Stocks gyrated Tuesday ahead of the much-anticipated data. The S&P 500 ended the day with a 0.25% gain, and the Nasdaq added 0.98%. The Dow Jones Industrial Average lost 84.96 points.

The closely watched benchmark 10-year Treasury yield retreated to about 2.99% Tuesday after a sharp run up to 3.20% Monday.

Bond yields — which move opposite price — have been running higher at a rapid pace on expectations of aggressive Federal Reserve interest rate hikes.

“I wouldn’t say tomorrow’s CPI matters by itself. I think the combination of March,

Tomorrow’s and May’s data will kind of be the big inflection point,” said Ben Jeffery, a fixed income strategist at BMO.

But Jeffery said the report has a good chance of being a market mover, no matter what.

“I think it will either reassert the selling pressure we saw that took 10s to 3.20% .

Or I think it will inspire more dip-buying interest for investors who have been waiting for signs that inflation is starting to peak,” he said.

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