Wall Street is becoming more concerned about tightening monetary policies. Market participants, including traders and money managers, are concerned about the implications of tomorrow’s Producer Price Index (“PPI”) and today’s Consumer Price Index (“CPI”) release from the Bureau of Labor Statistics. They will provide us with the most recent information on inflation. They will most likely show an increase in costs.
Inflation can be controlled by the Federal Reserve in two ways. First, raise interest rates. Inflation is often caused by higher borrowing costs. This can lead to less money in the financial system. The yield on U.S. 10-year Treasurys has increased to 2.77%, compared with 2.39% at beginning of last week and 1.73 at the beginning of March.
This change could lead to slower economic growth, which could have a negative impact on the S&P 500 in the near future.
National Economic Council Director Brian Deese stated that the domestic economy faces increased uncertainty because of supply-chain delays, rising inflation, and increasing volatility.
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The yields of U.S. Treasury bonds rose ahead of the publication of the Bureau of Labor Statistics’ Consumer Price Index (“CPI”) data. This raises concerns about domestic growth prospects.
Christopher Waller, a Federal Reserve board member, said that it will be difficult for the central bank not to tighten monetary policies but not to hurt economic output.
Federal Reserve Bank of Chicago President Charles Evans stated that the central bank must raise interest rates at an “accelerated” pace.