Product prices in the United States increased 6.5 percent year on year in December, with investors anticipating a 25% interest rate hike in February
Finally, some good news in the stock market has investors feeling that the inflation danger is waving away. For the first time since March 2021, food and grocery prices cooled down at a low rate. According to some experts, recent data show that the market is recovering and thriving again. Experts see that inflation has peaked, and recent declines in food prices clearly prove that.
In response to recent data, the major Wall Street indexes opened higher on Thursday. The S&P 500 index jumped by 0.46% to reach 3,987.57 basis points this year. Nasdaq stocks skyrocketed this week and covered some of last week’s setbacks. The index rose by 0.65% to 11,003.50 basis points. The recent rise in tech stocks has boosted the crypto market.
Unlike 2022, 2023 seems like a much better year for cryptocurrencies. In today’s session, BTC prices jumped by 4.65% to $18,187. ETH’s price jumped by 4,74% to $1,390, and BNB added 2,32%.
Meanwhile, the commodity market is showing some gains; gold is near the $1900 level. Gold prices jumped higher as worries about higher interest rates could cause a market recession, Gold has historically performed well during market upheavals and downturns. In today’s session, gold rose by $1.03 to $1862 per ounce, increasing by more than $100 in the past six weeks. Crude oil, WTI, and Brent oil all posted an average increase of 5%–17%. Still, energy prices seem to have cooled down compared to the first week of 2023.
The Bureau of Labor Statistics shows that prices in the U.S. rose by 0.1% in December, and food prices jumped by 0.5% in the same month. In the last 12 months, prices in the U.S. rose by 6.5%. And that counts as a good inflation date. Considering the recent market turmoil caused by increasing COVID cases and increasing tension between the U.S. and China.
Since the March 2021 inflation report, food prices have finally cooled down after reaching a 40-year high. With a positive producer price index and a positive labor market report last week, investors are hoping for more easing interest rate hikes. Since last week, experts’ hopes for an easing monetary policy have increased, and now some marketers are hoping for a 25% interest hike by the next meeting. Till now, nothing is certain; it is only an assumption, and all assumptions indicate a range of a 25%–50% interest hike in February.
Banks may maintain the current level of half-point hikes for two-minute readings. The first reason is to tame inflation as soon as possible, yet this approach carries a greater risk on Wall Street, particularly for the S&P 500 and tech stocks.
The second reason is to boost dollar potential in the market. The U.S. dollar has been falling against the euro for the last eight weeks, and it is now worth $102 per euro.