Cooling inflation readings have helped fuel a strong comeback of the stock market from last year’s steep losses. The recent Gross Domestic Product (GDP) figures from the Commerce Department showed that the U.S. economy expanded by 2.9% in the fourth quarter of 2022, driven by consumer spending.
As inflation fell to the lowest level in over a year to 6.4% in January, it has stoked some optimism among investors that the central bank may be able to bring inflation down without tipping the economy into a recession.
