NEW YORK (Reuters) – The U.S. stock market will be watching the February consumer price index (CPI), which is released on Wednesday, as a predictor of market performance in the week starting on Wednesday.
Markets have already been weighed down by Powell’s hawkish congressional testimony and the biggest bank failure since the financial crisis.
February 10’s employment report was mixed, and fears of a big interest rate hike have subsided somewhat.
But a higher-than-expected CPI could rekindle fears of a big rate hike. The bankruptcy of Silicon Valley Bank, a subsidiary of financial holding company SVB Financial Group, could add to the turmoil in the market.
In the market on the 10th, in addition to SVB, investors braced themselves to see how far the impact of the collapse of Silvergate Capital, a US bank holding company whose main business is trading with crypto asset (virtual currency) related companies, will spread. There were many.
“The concerns emanating from the financial sector are having ripple effects across markets,” said Michael James, managing director at Wedbush Securities.
The odds of a 50 basis point rate hike at the March 21-22 Federal Open Market Committee (FOMC) meeting on March 21-22 have risen to 40% from around 70% the previous day, according to CME FedWatch. Decreased.
“The Fed now has clear evidence that rate hikes are having an impact on the financial system and the economy,” said Mark Ehful, chief investment officer at UBS Global Wealth Management. ‘ said.
If February’s CPI rises above analyst expectations of 6%, the outlook for interest rates could change again.
John Lynch, chief investment officer at Comerica Wealth Management, said the drop in CPI from its peak of 9% to its current level was “an easy move”, but the drop from 6% to 3% He pointed out that it would be more difficult.
