That’s two-for-two for investors looking for inflation data supportive of rate cuts later this year. The consumer price index rose 2.9% in December from the year-earlier period, in line with a Dow Jones consensus estimate. So-called core CPI, which strips out volatile food and energy prices, increased by 3.2% year on year. That’s slightly less than expected. Shelter — which has long been an upward driver of inflation — rose just 4.6% on a year-over-year basis, the slowest increase since January 2022. The report came a day after the government posted lighter-than-expected wholesale inflation figures . Stock futures ripped higher after Wednesday’s data release. Futures tied to the Dow Jones Industrial Average popped more than 600 points, while those linked to the S & P 500 and Nasdaq-100 jumped 1.5% and 1.8%, respectively. Check out what some investors had to say about the report, and what they think it could mean for future U.S. monetary policy moves: Tina Adatia, head of fixed income client portfolio management at Goldman Sachs Asset Management: “After recent red-hot data, today’s softer than expected core CPI reading should help cool fears of a reacceleration in inflation. While today’s release is likely insufficient to put a January rate cut back on the table, it strengthens the case that the Fed’s cutting cycle has not yet run its course. With labor market data remaining robust, however, the Fed has scope to be patient and more good inflation data will be required for the Fed to deliver further easing.” Skyler Weinand, chief investment officer, Regan Capital: “Wednesday’s softer-than-expected CPI print offers some relief, especially after last Friday’s hot employment numbers, that the Fed may be able to still cut interest rates in 2025. Even if the Fed cuts rates in 2025, it’s likely to be 6-8 months away, as we are still too far from the Fed’s inflation target for the Fed to continue their rate cut march anytime soon.” Priya Misra of JPMorgan Asset Management: “We were in the danger zone [in terms of yields]. As the 10-year got closer to 4.75%-5%, I think it’s a danger zone for the economy, because there are intra-sensitive sectors. … I think this is a good number. It’s a sigh of relief for the bond market as well as the equity market.” Roger Ferguson, former Fed vice chairman and ex-TIAA chief executive officer: “I think the Fed is looking for trends. The market is very excited about a slight move one way or the other. The truth of the matter is, underlying all of this, the economy is strong. The labor market remains strong, and inflation is moving to the 2%, it’s moving glacially. And so I think the answer is, you stand pat at the next meeting, wait for more information to get a clearer view.” Jochen Stanzl, chief market analyst at CMC Markets: “We are now seeing falling rates precisely where the shoe pinches the most, namely in core inflation. This is exactly what the bulls on Wall Street were hoping for. The decline in core inflation is a relief, even if core inflation is still well above the Fed’s 2% target.” Elsewhere Wednesday morning on Wall Street, Morgan Stanley upgraded CBRE to overweight from equal weight, calling for more than 25% upside ahead for the commercial real estate stock. “It may be underappreciated that CBRE has significantly evolved since the financial crisis; today ~60% of EBITDA comes from resilient business lines (vs peers at 40-55%) including project management, facilities management, property management, valuation, loan servicing and investment management,” Morgan Stanley wrote.
