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Fed policymakers remain cautious, with Chair Jerome Powell reiterating the need for restrictive policy until inflation moves sustainably toward 2%. However, analysts noted that the latest inflation data suggests underlying PCE inflation could decline to 2.6% or 2.7% year-over-year, down from 2.8% in December.
With the Trade Desk due later this month, markets will closely watch upcoming economic data, including jobless claims and retail sales, for further clues on the Fed’s next steps. Traders are likely to remain focused on Treasury yields and corporate earnings as key market drivers.
Where Is the Market Headed Next?
With inflation data in focus, traders are looking ahead to the PCE price index release later this month, which could provide further clarity on the Federal Reserve’s stance.
Corporate earnings remain a key driver, with major tech names continuing to fuel market gains. If bond yields remain stable and upcoming economic reports support a slowing inflation trend, stocks could see further upside.
However, any surprises in inflation or global trade developments could inject volatility into the market.
More Information in our Economic Calendar.
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