Nasdaq slide drives stocks lower with earnings, hearing confirmation of PICCENT in focus

Stocks rose on Wednesday after the December CPI reading Core inflation finally showed some relief Investors calibrated bets on a Fed rate cut.

But the risk of price stability still looms large Change the system In Washington when President-elect Donald Trump takes office next week. Economists largely agree that the battle to curb inflation is far from over.

“Inflation has not been consistent,” Claudia Saham, chief economist at New Century Advisors and a former Fed economist, told Yahoo Finance. Morning brief program. “It was completely uneven.”

Although inflation slowed, it remained above level Fed target at 2% On an annual basis. High shelter costs Essential services such as medical care and insurance contributed to stubborn readings in recent months, with consumers at the same time feeling the pinch. In grocery stores and Also in the pump.

“I don’t think we’re completely out of the woods here,” Ed Yardeni, president of Yardeni Research, told Yahoo Finance. Control the market over time. “We have to remember that at the end of 2023, There were deflationary trends. Then we got to 2024 and we saw a little bit of a reversal in that.”

High wages and a strong labor market These have somewhat offset recent price pressures, but fundamental trends show continued stability in the categories on which most households depend. This makes the Fed’s mission Even more difficult to withdraw.

“Getting some ‘not bad’ news is a bit of a breather,” Sahm said, referring to the December slowdown in monthly housing inflation and core prices. But “this isn’t really a game-changer. It’s much more so than what we saw with the mixed monthly volatility.”

Volatility is likely to increase as Trump takes office on Monday.

Trump’s proposed policies, such as higher tariffs on imported goods, corporate tax cuts, and restrictions on immigration, It is seen as inflationary. And those policies It can add complexity The central bank’s path forward regarding interest rates.

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