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CPI Data and Fed Meeting: What You Need to Know

Supervest, LLC

From a macroeconomic perspective, the release of the Consumer Price Index statistics (CPI Data) and the Fed’s final meeting of 2022 made it a significant week.

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Its excellent news all around that inflation was lower than anticipated and that the rate of decline is quickening.

CPI data came in at 7.1% compared to predictions of 7.3%, which was a welcome surprise and helped the stock market gain 0.7%.

Inflation is slowing. CPI Data

Inflation was lower than anticipated. Photo by Sean Robertson on Unsplash

Analysts now anticipate just one more 50 bps hike before rates peak at around 5% in July 2023, according to remarks from the Fed meeting.

In positive news, the prices of US imports fell for the fifth month in a row in November, helped along by a strong dollar and cooling costs of fuel.

Mortgage rates have also gone down for five weeks in a row and are now at 6.6%. Whilst buyers are still facing an affordable housing shortage, it is hoped that the rate decrease will help stabilize demand.

Inflation in the UK came in at 10.7% in November, which was a little lower than what was expected. Again, lower fuel prices helped ease price pressures.

Lower fuel prices aid inflation slow down.  CPI Data

Lower fuel prices are helping to ease inflation. Photo by Jack Prichett on Unsplash

In less encouraging news, rates were lifted last week by 50 bps by the central banks of the EU, the UK, and Switzerland.

Retail sales fell 0.6% in November, which was even worse than the 0.3% drop that the Dow Jones thought would happen.

The European Central Bank thinks that inflation will stay above its goal of 2% for the next three years.

New data also shows that this has been a terrible year for initial public offerings (IPOs) in tech, as global numbers were down 45% year over year.

In the US, 2022 will be the worst year for initial public offerings since 1990. Only 74 companies have raised $8 billion. That’s 95% less than in 2021 and 50% less than any year in the past 31.

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