Wall Street investors await the next set of US CPI inflation data from the U.S. Bureau of Labor Statistics which will be reporting the August 2022 CPI data on September 13, 2022. Last week’s trading session closed with all three major indices Dow 30, S&P 500 and Nasdaq Composite clocking gains of 2.66%, 3.65% and 4.14% respectively. This week and the week after, hold the key to giving some direction to the Wall Street investors and traders. US Fed’s FOMC is scheduled to meet on September 20-21 to decide on the rate hike.
Dow 30, S&P 500 and Nasdaq Composite indices closed higher by 0.71%, 01.06% and 1.27% respectively, on Monday.
The quantum of a rate hike in FOMC’s September meeting may depend largely on August CPI numbers. Some expect the Fed to hike the rate by 50 bps while many analysts expect Fed to deliver its third consecutive 0.75 percentage point rate hike in an effort to combat high inflation. Fed chief Powell had already indicated that tackling inflation by raising rates remains the central bank’s top priority even if there is pain to the economic conditions.
Although the US economy has seen two-quarters of negative growth in 2022, which is typically considered a sign of a recession, low unemployment, and strong spending indicate that activity has not slowed much. The US inflation rate has also reached a 40-year high this year. The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Amidst a mix of good, bad, and ugly macroeconomic data, whatever happens from now till September 21-22, the markets are going to remain volatile. Any bad piece of news may further dampen the sentiments.