Inflation party wraps up early
Wall Street Breakfast
Seeking Alpha
3.8 • 950 Ratings
🗓️ 12 March 2025
⏱️ 6 minutes
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| 0:00.0 | Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. |
| 0:09.9 | Good afternoon. Today is Wednesday, March 12th, and I'm your host, Kim Kong. Our top story so far. The party was over before it began. |
| 0:17.2 | A soft inflation report before the bell brought out stock buyers, but they quickly retreated |
| 0:21.4 | and gains faded into the open as investors looked under the hood. |
| 0:24.9 | The February CPI rose 0.2% on the month, lower than the 0.3% consensus, and the 0.5% rise |
| 0:31.5 | in January. |
| 0:32.6 | That brought the annual headline rate down to 2.8%. |
| 0:35.1 | The core CPI rose 0.2% month-on-month versus 0.3% consensus, |
| 0:40.3 | and 0.4% in January. The core annual rate cooled to 3.1% lower than the 3.2% forecast. |
| 0:48.3 | At first blush, this was a big relief for investors, but as Pantheon macro pointed out, |
| 0:52.7 | the figures came in below consensus because of a |
| 0:54.9 | plunge in airline fares, which won't feed into the core PCE index. That's the Fed's preferred |
| 0:59.7 | inflation gauge. RSM, U.S. chief economist Joseph Bressowales, sees some threatening trends deeper |
| 1:05.5 | in the data as inflation in the services sector remains sticky. As we've recently noted, |
| 1:10.3 | the combination of slower growth, we think GDP will arrive at 1.5% in the services sector remains sticky. As we've recently noted, the combination of slower growth, |
| 1:12.0 | we think GDP will arrive at 1.5% in the current quarter, and sticky inflation like that, |
| 1:17.0 | observed inside the services sector index, creates the conditions for stagnation at best and |
| 1:21.7 | stagflation at worst, he said. As for Fed forecasts, despite the softer numbers, the odds of a rate cut in June declined, although they're still at 80%. |
| 1:30.5 | In the bond market yields rose, with a 10-year back at 4.3%, indicating traders were more worried about a recession than short-term policy moves. |
| 1:39.4 | Skyler Wynon, CIO at Reagan Capital, says even with a weaker CPI, we believe the Federal Reserve is still in wait-and-see mode for at least the next six to eight months. |
| 1:48.9 | The tariff-driven stock market correction is unlikely to cause the Fed to cut interest rates sooner, and any rate cuts are likely still to come towards the end of 2025. |
| 1:57.7 | If this malaise persists for longer than the next few months, we will start to see the consumer |
... |
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