Last year was arduous for the stock market, with high inflation worries and the Federal Reserve tightening monetary policy aggressively. However, the seven rate hikes now appear to bear fruit, as inflation eased for the third consecutive month in December. The final month’s Consumer Price Index (CPI) increased by 6.5% over last year and decreased by 0.1% from the prior month.
However, economists expect this data would not deter the Fed from hiking rates this year, as U.S. jobless claims recently fell to a three-month low, indicating continued tightness in the labor market. Stuart Hoffman, a senior economic advisor at PNC Financial, said, "Right now the labor market is too tight for the Fed, and job growth is too strong."
