Investors react as consumer prices rise at slowest rate in 2 years

music. That noise, a happy applause. It means it is today's closing bell at the New York Stock Exchange. But how do we do, Aero? I don't know. Let's take a look at the big board, zoom it on in, lots of red. But take a look at where the numbers are settling here at 4 p.m.

on the East Coast. The Dow Jones average pulling back about 40 points, but really a flat day. The S&P 500 in the NASDAQ. End of the day in the greens slightly. The S&P is up around half a percent. And the NASDAQ looks like that's up around 1%. Well, Scott, Ren joins us now.

He's a senior global market strategist at Wells Fargo. Good to have you. We'll start off with that easy question that you know. What was driving the market today? Well, Lana, I tell you, I think that the market is convinced that overtime inflation is going to go down. But we're going to continue to respond on really a report to report basis. Anything that makes inflation look like it might be going up is going to hurt the market. Anything that suggests inflation might be working its way lower is going to help.

So I would argue that today's CPI report was a little neutral. It had a few positives in there. But you could tell by the mixed finish that not everybody is certain as to what's going to happen. Yeah, mixed indicators and then a mixed finish. Yeah, definitely. So then, Scott, what might all of that mean for the Federal Reserve moving forward? I'd like to hear that inflation is cooling. I mean, that at least seems like a positive development.

Oh, it's definitely a positive, Aralyn. And we've seen, if you look at what's happened over the last year, I mean, inflation's a lot lower over the last year. It's kind of stalled here a little bit over the last few months, though. It hasn't gone down. We've expected it to go down. But of course, it's not going to go down in a straight line. And that's what the market's going to be concerned about.

But for us, the Federal Reserve, we expected this 25 basis point increase last year. But really, from here, I think it's a pretty simple question. If inflation stalls here and does not come down, Federal Reserve is going to continue to high grades. Because while it's great, we've gone from a little over 9% to a little under 5% in the consumer price index over the last year or so. But that's still way above where the Federal Reserve wants to see it. Yeah. Well, Scott, you're talking about the consumer price index.

There's another important industry that is going to be released tomorrow. Producer Price, the PPI, when we get it, what are you expecting to see? Well, I tell you, it's really the same story as CPI, where if you look at what's happened over the last year, it's down quite a bit over the last year. But when you look at it here over the last few months, once again, it's stalled. And so the Federal Reserve certainly doesn't want to see it stall. They also know that all these rate hikes that they've done, there is some lag effect. So they hike rates last week. Well, theoretically, the economy might not feel that for six or nine months.

So if you think about it right now, there's still a lot of rate increases that we've seen over the last six or nine months that theoretically are just starting to hit the economy now. So it's going to be a similar pattern. Inflation stalled here for right now. But from our perspective, for the Consumer Price Index anyway, we're looking for readings below 3% by the end of the year. So that's good news. And I think the market will like that. Below 3%? I think we'll all like that.

Scott Renn. Take those numbers, yeah. Thank you. Thanks, Scott. All right, thanks, guys.

Stock Market, New York Stock Exchange, Inflation, cpi, moneywatch, Economy, housing market, errol barnett, lana zak, investors, scott wren