So far this year, the market rally has been impressive coming out of 2022’s sell-off. Moderating inflation data has been a key market driver over the past several months. The inflation rate fell to 6.5% in December but remains far above the 2% target range.
Economists expect headline inflation to fall from 6.5% to 6.2% in the next Consumer Price Index (CPI) reading. As inflation falls closer to the Fed’s target and as earnings revisions show signs of bottoming, markets will likely march toward an economic recovery.
