Traders await inflation data while dealing with mixed economic reports. Maryland's economic conditions and challenges are discussed. The importance of cyber preparedness for finance leaders is highlighted. US retail sales decline after a strong holiday season. Small businesses, cybercrime, and pop culture's impact are explored. Concerns about inflation and rate cuts are discussed. Investors are advised to be patient and seek opportunities in the market.
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Quick takeaways
Investors are cautioning against overly optimistic expectations for rate cuts this year amid concerns over inflation.
Rising prices in areas like shipping costs and the ISM Services Index's rising price component are fueling concerns of sticky inflation.
Amid concerns over inflation, investors are cautioning against overly optimistic expectations for rate cuts this year. Disappointing retail sales in January are not causing as much worry, as it may be a result of seasonality and a give-back from the strong December performance.
Risk of Inflation Reacceleration
Rising prices in areas like shipping costs and the ISM Services Index's rising price component are fueling concerns of sticky inflation. While it is premature to predict a full-blown resurgence, there is a risk that inflation could stall that progress that has been made.
Concerns over Fed's Rate Hiking Cycle
The Fed's aggressive rate hiking cycle has contributed to easier financial conditions, but it also raises the risk of re-inflation and potential difficulties in achieving the 2% inflation target. The recent rise in mortgage rates and other factors may constrain economic growth and pose challenges.
Investment Strategy amid Uncertain Outlook
Investors are advised to consider holding extra cash as the Fed may remain on hold longer than anticipated. Rebalancing portfolios to maintain desired asset allocations is also recommended. Opportunities may arise in the small and mid-cap space, which have priced in more downside risks.
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg News International Economics & Policy Correspondent Michael McKee discusses Thursday's mixed economic reports as traders gear up for Friday’s inflation reading for clues on the Federal Reserve’s rate path. Maryland Comptroller Brooke Lierman shares the details of her office’s first State of the Economy report. Anjee Solanki, National Director of US Retail at Colliers, explains how retailers are investing in automation and AI. And we Drive to the Close with Megan Horneman, CIO at Verdence Capital Advisors. Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.