The latest inflation report keeps the Fed on track for a quarter-point rate cut. Wall Street isn't satisfied.

Published On Sep 11, 2024, 12:02 PM

The latest inflation report indicates that the Federal Reserve is on track for a quarter-point interest rate cut next week, which may not meet the expectations of some Wall Street investors who were hoping for a larger, half-point cut. Even though inflation has eased, the Consumer Price Index (CPI) shows a core increase of 3.2% in August compared to a year earlier, mainly due to rising costs in housing. The market reacted negatively to the news, reflecting disappointment. Analysts believe that the Fed will focus on the job market in future meetings and may implement additional rate cuts depending on labor market conditions.

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Stock Forecasts

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Positive

The Fed's impending quarter-point rate cut is likely to support continued market recovery in the medium term, especially in sectors sensitive to interest rates, such as real estate and tech.

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Negative

Consumer discretionary stocks may face pressure due to rising consumer prices, despite the overall positive outlook for the economy from rate cuts.

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