Inflation's Grinding Lower, But Not To A Stop Just Yet

U.S. inflation is grinding lower, but the still elevated pace of core price growth will keep the Fed on track to raise rates at least two more times this year, says Larry Shover. He discusses what the bond market is indicating, as well as what the technicals are showing in markets following the CPI release. He talks about how coming into 2023, this year was widely viewed as an inevitably bond-bullish one. A slowing economy combined with moderating inflation and the Fed achieving its terminal rate all pointed toward lower yields as the path of least resistance. He then notes that it’s difficult to overstate the relevance of Tuesday’s CPI data as a potential inflection point after the market repriced following January's jobs report to reflect Powell’s commitment to bring policy rates above 5% with the goal of keeping them there for an extended period of time. Tune in to find out more about the stock market today.