Stocks on Wall Street closed higher on Thursday, with the S&P 500 hitting an all-time high as economic data appeared to support the Federal Reserve’s claim that a price hike will be temporary.
Data from the Labor Department’s consumer price index (CPI) came in above expectations and added further argument to the debate about whether current price increases could turn into long-term inflation, despite the Federal Reserve has claimed otherwise.
But a closer look showed that much of the price hike came from products like raw materials and airfares, and is therefore likely to be temporary.
Faced with an increase in inflation, the Federal Reserve should choose to reduce economic stimuli to try to contain it. The stimuli have been one of the main incentives of the market in recent months.
“We had extremely boring market days earlier this week as we all had our eyes on the bullseye of this IPC report,” said Ryan Detrick, senior market strategist at LPL Financial.
“But once people looked below the surface, most of the higher inflation is due to the reopening and stocks had a rally of relief. The market is taking it easy as it realizes the economy is failing. reheating, “Detrick added.
A committee of the U.S. House of Representatives passed a $ 547 billion infrastructure spending bill earmarked for surface transportation, adopting some of President Joe Biden’s proposals as part of his broader infrastructure package of 2.3 billions of dollars.
With information from Reuters.
