Wall Street Breakfast Market getting used to higher rates for longer
Feb 13, 2025
The latest CPI report stirs the market, but stocks manage to hold steady. Rising interest rates are particularly impacting real estate investment trusts and home builders. There's intriguing interplay between tariffs and inflation, with gold emerging as a potential hedge. As the economic landscape quiets down, the focus shifts to Federal Reserve commentary for cues on future rate adjustments. Investors are urged to stay alert to market sentiment in this uncertain terrain.
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Market Reaction to CPI Report
- The CPI report suggests no rate cut in March, pushing it to June, July, or September.
- Stocks initially dipped but recovered, indicating the market is adjusting to higher rates.
Monitoring Market Impact
- Monitor interest-rate-sensitive sectors like REITs and homebuilders.
- Watch treasury market trends to gauge overall market sentiment on inflation.
Fed and Administration Dynamics
- Powell's testimony focused on the Fed's relationship with the administration, not just inflation.
- The administration's stance on interest rates adds complexity to the Fed's decision-making.