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Away from view of the controversy over Trump’s tariff are two major inflation reports this week
The first comes out on Thursday and a little improvement must appear from March. The second is about the prices of producers, on Friday.
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But whether the improvement is sufficient to alleviate inflation fears caused by tariff questions, it will not be clear for a short period. On Wednesday, President Trump stopped imposing tariffs other than the baseline by 10 % in many countries for 90 days.
The only exception was China, and the management strengthened the tariffs on goods imported from China to the United States to 125 %.
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A temporary stopping to reduce many people in non -American countries. They were facing a higher tariff for goods in the United States, Trump’s pause was launched in a large market gathering.
The nasdaq compound index has won the largest point for one day ever and the largest percentage for one day since January 3, 2001.
The Standard & Poor’s 500 index increased by 9.7 % a day, which is the largest percentage of one day since October 2008.
Thursday’s report is the consumer price index for the month of March. Issued by the Labor Statistics Office, and appears before the opening of the financial markets in New York. On Friday, it will be followed by a report of the product price index, which measures the prices received by companies.
FactSet, Business Analysis Company, estimate that the Consumer Prices Index will show consumer enlargement by 2.6 % on an annual basis, with a slight decrease in change by 2.8 % per year in the February report.
The consumer price index report in January showed a 3 % annual change. It was from December and the fourth monthly increase in a row.
Post -guardian prices have made many consumers hesitant in extravagance, especially this year, preferring to search for savings in stores like walmart ((WMT)) Costco in bulk ((Assign)) Or target ((TGT)) .
Why this matters
A long short story: The federal reserve focuses on lowering inflation to 2 %, and for the Federal Reserve Jerome Powell, 2.6 % remains very high.
The Federal Reserve wants to inflated – or near – 2 %. Its motives on this point are the following after the Covid-19 in 2022, when the consumer price index reached about 9 %.
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Therefore, it does not matter if you are looking for inflation measures in the consumer price index data or the product price index report on Friday. It is an important 2 % level.
More importantly, it will not affect the index of personal consumption, which the Federal Reserve considers the best inflation report. PCE data data follow prices. The report comes from the Trade Department. The following report does not come out until April 30.
The last PCE report showed that prices rise by 2.5 % throughout the year in February, unchanged from January.
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Where rates stand
Because of this extreme focus on inflation by 2 %, no matter how specific, the Federal Reserve has left the major federal funds rate at 4.25 % to 4.5 % since November. Mortgage rates were approaching 7 % on Wednesday. Prices in these levels and high house prices have been exposed to home sales depression since the end of the Covid-19s.
President Trump, however, was pushing the Federal Reserve to move faster to reduce prices.
This rope tension is affected by the tariff because all economists believe that definitions enhance inflation.
The Federal Reserve is expected to leave the Federal Reserve Funds without a change in its meeting from May 6 to 7.
The CME Fedwatch tool reduces a rate of a federal reserve meeting from 17 to 18 June, which is again in July and the third in the fall.
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