What today’s inflation figures mean for the stock market – and your 401(K) and mortgage

Despite today’s encouraging inflation figures, consumers are still feeling the effects of higher prices, experts warn.

Mark Hamrick, senior economic analyst at Bankrate, said that while the 2.9 percent annual inflation rate is “good news,” prices are still high for many.

“There is mounting evidence that consumers are struggling with the combined burden of high prices, rising interest rates and a cooling labor market,” he said.

‘Even with the “as expected” numbers, prices continued to rise overall last month.’

This comes after hardware store group Home Depot reported that consumers are feeling gloomy about the economy.

The company yesterday lowered its revenue forecast for this year as customers spend less on home renovation projects.

Walmart is set to report its quarterly results on Thursday, which should provide a good picture of how the American consumer is doing.

New York City has the worst inflation problem in the US, according to a new WalletHub report. study.

The study analyzed 23 major cities and compared price developments over the past two months and over the past year, providing a snapshot of short-term and long-term inflation changes.

It found that New York City had the most persistent price growth, followed by Minneapolis, Detroit, Chicago and Honolulu.

Houston tops the list of cities with the least inflation problems, followed by Riverside, California, Denver, Boston and Miami.

While prices of many essential services and items fell in July, the cost of car insurance remained stubbornly high.

The motor vehicle insurance index rose 1.2 percent in July, after a 0.9 percent increase in June.

Car insurance prices have risen by 18.6 percent over the past year, making it one of the biggest increases.

US stock markets opened flat on Wednesday after the inflation report came out as expected.

The S&P 500 rose 0.3 percent, the Nasdaq Composite fell 0.1 percent and the Dow Jones Industrial Average rose marginally, 0.09 percent.

This stability is good news for markets and for consumer pension accounts, after the turbulent period of recent weeks.

Investors looked to the consumer price index to get a better sense of the overall state of the economy and the likelihood of a rate cut in September.

“Today’s expected CPI is unlikely to cause any problems,” said Chris Larkin, managing director of trading and investment for Morgan Stanley’s E-Trade.

“The key question now is whether the Fed will cut rates by 25 or 50 basis points next month.”

President Joe Biden said the report “shows we’re continuing to make progress in fighting inflation and lowering costs for American households.”

“Inflation has fallen below 3 percent and core inflation has fallen to its lowest level since April 2021,” he said in a statement.

“We still have a lot of work to do to lower costs for hardworking Americans, but we are making real progress, with wages rising faster than prices for 17 straight months.”

Food inflation was generally low in July, rising 0.2 percent from the previous month, the same rate as in June.

However, some articles showed a significant increase.

Egg prices rose 5.5 percent from June, faster than the 3.5 percent increase in June.

This is because bird flu has resurfaced in recent months.

Fruit and vegetable prices also rose slightly, by 0.8 percent over the month. In June, prices had fallen by 0.5 percent.

While prices are still rising year-on-year, they are doing so at a slower pace than expected — a boost to the economy. Most economists had forecast the annual consumer price index to be 3 percent in July.

Cooling inflation means more than just lower prices for Americans.

It gives Fed officials the green light to cut interest rates, a move that would lower borrowing costs for consumers and businesses.

A reduction in benchmark borrowing costs would mean lower credit card rates and auto loans. Ultimately, it would also mean lower mortgage rates.

This would allow Americans to spend more money and reduce borrowing costs for businesses.

Wall Street likes lower interest rates, which means stock prices and 401(k) pension funds rise.

The latest data shows that used car and airfare costs are deflationary.

The airfare index fell 1.6 percent, in line with anecdotal reports from travelers this summer.

US stock futures struggled to find direction and fell slightly after this morning’s inflation report.

S&P 500 futures were unchanged, Nasdaq futures fell 0.2 percent and Dow futures fell 0.1 percent.

Yields on 10-year government bonds, which rise when bond prices fall, rose slightly to 3.87 percent.

This suggests that traders may have been expecting even lower inflation.

The cost of housing, also known as the housing index, accounted for 90 percent of the monthly increase in inflation, which rose by 0.2 percent in July.

Economists had expected that the large rent increases of recent years and months would already be visible in the figures.

But the index continues to rise, suggesting the gains are not over yet.

The inflation report, released Wednesday by the Labor Department, is likely to be the deciding factor for the Federal Reserve to cut interest rates at its next meeting in September.

Economists will now be wondering how much the Fed will cut key lending rates.

Lindsay Rosner of Goldman Sachs Asset Management said the data “cleared the way” for a quarter-percentage-point rate cut by the Fed in September, “but didn’t completely close the door” on a half-percentage-point cut.

Since July 2023, interest rates have been at their highest level in 23 years: between 5.25 and 5.5 percent.

Consumer prices rose by 2.9 percent in July compared to a year earlier.

It is the first time since March 2021 that headline inflation, measured on an annual basis, has fallen below 3 percent.

Economists polled by Dow Jones expected a 3 percent increase.

On a monthly basis, prices rose by 0.2 percent, in line with expectations.