The data on the consumer price index published yesterday gave rise to optimism on the stock market. The CPI had been forecast to be 0.4%, and the actual value happened to be even less - just 0.3%.
This figure was taken by the market as a verification of Powell’s words regarding the temporary nature of inflation.
Of course, there remain other risks related to, first of all, reaching the ceiling of the US sovereign debt and the possible shut-down of the government, but these obstacles pose a technical and insignificant issue since they will be quickly resolved without negative consequences.
That’s why, as for today we can see a clear sky for the US stock market for the next 2-3 weeks, right up to the symposium that is scheduled to take place on August 26-28th in Jackson Hole.
At the same time, it is worth bearing in mind that this and next Thursdays’ data can correct the overall picture based on the initial unemployment data.