The October CPI report sparked a steep rally in stocks and represented a game-changer for the market. Moreover, looking at the signs of inflation cooling, the majority of policymakers recently agreed it would “likely soon be appropriate” to slow the pace of interest rate hikes.
Fundstrat’s Tom Lee reiterated that softening inflation would change the Federal Reserve’s hawkish stance on raising rates to bring prices down. He said that the stock market could see “fireworks” in the last five weeks of the year, with signs pointing to inflation cooling in November. Lee also predicted the S&P 500 to reach 4,400-4,500 by year-end, about 10% higher than current levels.
