Aggressive rate hikes by the Fed to curb sky-high inflation last year had resulted in massive selloffs, but it did have its intended effect. Inflation eased for the sixth consecutive time in December. CPI increased by 6.5% year-over-year and dipped 0.1% over the prior month, in line with the Dow Jones estimate.
Although cooling inflation raised investor confidence and signaled the downsizing of rate hikes, according to most economists in a Reuters poll, the Fed would serve 25-basis-point rate hikes at its next two policy meetings and then hold rates steady for at least the rest of the year.
