Fed's messaging on rates post-CPI
Watching the Fed's tone following that CPI print last week. While the headline number wasn't entirely unexpected, the core inflation component still has some sticky elements that I think are going to keep the doves at bay for a bit longer. My read is we're looking at a continued 'higher for longer' narrative, perhaps with a slight softening of the most aggressive hiking rhetoric, but certainly no pivot yet. This sustained hawkish lean keeps me cautious on growth stocks; I'm still favoring defensive plays and looking for dips in quality names that can weather an extended period of tighter money. The $COMP at 11.74, down 2.17% today, with a daily range of 11.66-12.025, seems to reflect some of this underlying tension in the market, though I wonder if there's still more downside if rate cut expectations get pushed out further.
It does feel like the Fed is playing a very slow, very public game of economic Jenga, trying to remove pieces without toppling the whole thing. Higher for longer seems to be the only consistent mantra these days, with any deviation quickly corrected.