Posted 12/20/2023, 11:00:46 AM
Investors Hopeful but Inflation Persists, Raising Questions Around Fed Rate Hikes
- Investors are optimistic about a "soft landing" for the economy, but inflation data suggests the Fed's work may not be done
- Services inflation remains stubbornly high at over 5%, worrying some Fed officials
- Markets may be underestimating the risk of an overheating economy that requires more rate hikes
- Q4 GDP is tracking at a strong 2.7%, fueling questions around whether a "no landing" with reaccelerating inflation is happening
- Fed officials are trying to temper high expectations for rate cuts anytime soon