Financial markets remain calm as investors tolerate above-target inflation

  • Investors and traders are willing to tolerate above-target inflation
  • Financial markets appeared calm after the CPI report
  • Fed policy makers will release updated interest-rate forecasts next week
  • Market reaction function has changed, investors are willing to tolerate higher inflation with strong growth
  • Some traders express worries about inflation following the CPI report
  • The market is waiting to see how inflation data for March, April, and May will look
  • Lack of convincing evidence that inflation is abating suggests the Fed may be on hold for longer than expected

Investors and traders took February’s hotter-than-expected consumer-price index report in stride on Wednesday, signaling a willingness to tolerate above-target inflation while waiting for more data. Treasury yields were slightly higher, while fed-funds futures imply rate cuts by June. Stocks were mixed after reaching a new all-time high. Some investors are accepting higher inflation as long as economic growth holds up. However, there are lingering worries about inflation. Fed policy makers will release updated interest-rate forecasts next week, giving an indication of how they interpret the latest inflation readings. The market is waiting to see how inflation data for the coming months will look. The lack of convincing evidence that inflation is abating suggests the Fed may be on hold for longer than expected.

Factuality Level: 2
Factuality Justification: The article contains a lot of speculative information and opinions presented as facts. It lacks concrete evidence and relies heavily on predictions and assumptions about future events. The language used is sensationalist and overly dramatic, focusing more on creating a narrative rather than providing objective information.
Noise Level: 3
Noise Justification: The article provides a detailed analysis of the reaction of investors and traders to the hotter-than-expected consumer-price index report in February. It discusses various factors influencing financial markets, such as inflation, interest rates, and economic growth. The article includes quotes from market strategists and economists to support its analysis. However, the article contains some repetitive information and could be more concise in its reporting.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the reaction of investors and traders to the consumer-price index report and its implications for interest rates. It mentions Treasury yields, fed-funds futures, and stock prices.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article primarily focuses on financial markets and the reaction to economic data, without mentioning any extreme events or their impacts.
Public Companies: New York Stock Exchange (N/A)
Private Companies: FHN Financial,Glenmede Investment Management,BMO Capital Markets,Stifel, Nicolaus & Co.
Key People: Michael Reinking (Senior Market Strategist for the New York Stock Exchange), Will Compernolle (Strategist at FHN Financial in New York), Rob Daly (Oversees about $4.5 billion in fixed-income assets for Glenmede Investment Management in Philadelphia), Lindsey Piegza (Economist at Stifel, Nicolaus & Co. in Chicago), Lauren Henderson (Economist at Stifel, Nicolaus & Co. in Chicago)

Reported publicly: www.marketwatch.com