Consumer Prices, Core Inflation, Fed Speech: 3 Things to Watch
2022.04.11 22:51
By Sam Boughedda
Investing.com – Stocks sank on Monday as rising Treasury yields– which move inverse to price– sent tech shares tumbling.
Investors are bracing for tomorrow’s release of inflation data for March, which is widely expected to show price gains running their hottest in four decades.
Still, the job market is also at multi-decade highs, in terms of the economy being at full employment, as the economy recovers from the pandemic era shutdowns.
Tomorrow’s data release is the last time the Federal Reserve will see official consumer price index data before its May meeting, when it is expected to raise rates by a half point, rather than its customary quarter-point move.
Oil is down around $94 a barrel, which could be a sign the inflationary pressures of the last few months could be nearing a peak. If energy prices fall far enough, that will eventually work its way through prices for fuel and consumer goods.
Also this week, a spate of big company earnings as first quarter reporting season kicks off. Big banks are due starting Wednesday and other S&P 500 companies are on the agenda.
The U.S. stock market is closed Friday for the holiday weekend, so investors are looking at an abbreviated trading week.
Here are three things that could affect markets tomorrow:
1. Consumer prices
The US will report CPI data on Tuesday at 8:30 AM ET. For the year-over-year comparison, it is expected to show a gain of 8.4% after a 7.9% gain in February. Meanwhile, CPI for March from the prior month is expected to be 1.2%, above the previous 0.8% recorded, according to analysts tracked by Investing.com.
2. Core inflation
Core CPI MoM, which measures the changes in the price of goods and services excluding food and energy, is forecast to come in at 0.5% for March, matching February’s reading.
3. Fed speech
Fed Vice Chair nominee Lael Brainard will be speaking tomorrow. Last week Brainard said the Fed could start reducing its balance sheet as soon as May at a rapid pace. Brainard, along with Chair Jerome Powell, is still awaiting a Senate confirmation vote.
