Wall Street slowed down, with inflation in the background

LAST UPDATE: 18:39

Wall Street is holding back after the initial uptrend, with key indicators having lost much of their gains and now strengthening slightly as investors try to assimilate the data announced today for inflation.

According to data released by the US Department of Labor, inflation continued its rally in December, showing at the end of the year the largest annual increase since 1982. In particular, the consumer price index climbed to 7% in December after rising November by 6.8%, as announced by the US Department of Labor. On a monthly basis, inflation rose 0.5%, beating analysts’ expectations of a 0.4% rise, following a 0.8% rise in November.

The structural index, which does not include food and energy, rose 0.6% in December after rising 0.5% in November, climbing to 5.5%. This is the highest level in the last 31 years.

“Overall, the data is as bad as we expected. We expect the Fed to start raising interest rates in March, with a total of four base points increases of 25 basis points this year and another four in 2023,” wrote Paul Ashworth, chief US economist at Capital Economics.

RBC Capital Markets analysts, meanwhile, expect inflation to continue to accelerate in early 2022 before stabilizing and then slowing in the second quarter. “But the Fed is likely to feel the pressure from this early additional price pressure and feel compelled to start the cycle of interest rates even immediately after the March meeting,” they said in a statement. their customers.

Some economists, however, see inflation as showing signs of peaking and focus on its long-term prospects.

Federal Reserve Chairman Jerome Powell told the Senate committee yesterday that if inflation persists at higher-than-expected levels, the central bank should raise interest rates further. stressing, however, that this will be done carefully to avoid any negative consequences.

“We know that high inflation has a serious impact,” Powell said, adding that he was committed to using all of the central bank’s tools to prevent inflation from “consolidating.”

At the same time, however, Powell assured the markets that the Federal Reserve will be careful not to derail the economic recovery or cause damage to the labor market. “Now is the time to start moving from the pandemic emergency to a more normal level,” Powell said. “However, this should not have a negative impact on employment,” he added.

On the board, now, the indicators after the strong initial upward reaction slowed down sharply, turning even in negative territory, before returning again upwards, but recording slight gains.

In particular, the Dow Jones industrial average adds 60 points or 0.17% and moves to 36,311.92 points, the broader S&P 500 strengthens by 0.29% and stands at 4,726.90, while the technological Nasdaq gains 0.27% and trades at 15,194.50 points.

Of the 30 shares that make up the blue chips index, the majority is moving in a positive sign, with the Boeing, Microsoft and Nike securities leading the way with gains, rising 2.13%, 2.12% and 1.80% respectively .

In other stocks, Jefferies Financial Group’s title plunged 9.26%, after slightly lower-than-expected fourth-quarter earnings to $ 1.81 billion, while analysts set the bar at 1 , $ 9 billion.