{"id":7728,"date":"2024-01-16T12:55:01","date_gmt":"2024-01-16T18:55:01","guid":{"rendered":"https:\/\/www.keystonefinancial.com\/?post_type=oi_article&p=7728"},"modified":"2024-01-16T12:55:04","modified_gmt":"2024-01-16T18:55:04","slug":"market-commentary-january-16-2024","status":"publish","type":"oi_article","link":"https:\/\/www.keystonefinancial.com\/articles\/market-commentary-january-16-2024","title":{"rendered":"Market Commentary | January 16, 2024"},"content":{"rendered":"\n
Is inflation retreating?<\/p>\n\n\n\n
Last week, we received a lot of information about inflation. Some seemed to support the idea that inflation was sticky, meaning it wasn\u2019t moving lower, while other data suggested inflation was in retreat. Here\u2019s what we learned:<\/p>\n\n\n\n
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Headline inflation<\/strong>, as measured by the Consumer Price Index, suggested inflation was headed in the wrong direction last month \u2013 higher. It showed prices rising more than expected (0.3 percent, month-to-month) in December 2023. In November, prices rose less (0.1 percent, month-to-month).<\/li>\n<\/ul>\n\n\n\n
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Core inflation<\/strong>, which excludes volatile food and energy prices, showed inflation was steady. Prices rose by the same amount (0.3 percent, month-to-month) in November and December.<\/li>\n<\/ul>\n\n\n\n
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Producer prices<\/strong> are the prices producers received for goods and services. Last week, the Producer Price Indexshowed inflation was headed in the right direction \u2013 lower. Producer prices fell (-0.1 percent, month-to-month) in November and December.<\/li>\n<\/ul>\n\n\n\n
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Conflict in the Middle East<\/strong> could stoke inflation by sending the prices of oil and shipping higher.<\/li>\n<\/ul>\n\n\n\n
The Federal Reserve (Fed) has been working to bring inflation down since March of 2022. Over that time, it has lifted the federal funds rate from zero to 0.25 percent to 5.25 percent to 5.50 percent, and inflation has dropped from a peak of 8.9 percent in June 2022 to 3.4 percent in December 2023. The Fed\u2019s goal is to lower inflation to two percent.<\/p>\n\n\n\n
Markets are keeping a close eye on the Fed\u2019s success, because they want to see rates move lower. Lower rates put more money in the pockets of businesses and consumers, which supports economic growth and higher stock prices.<\/p>\n\n\n\n
Last week, few investors expected the Fed to begin lowering the federal funds rate this month; however, about three-fourths of them anticipated rates would begin to drop in March, according to data from the CME FedWatch Tool.<\/p>\n\n\n\n
Major U.S. stock indices finished the week higher. Yields on most maturities of Treasuries moved lower from last Friday to this Friday.<\/p>\n\n\n\n