- In-line inflation data fueled betting that the Federal Reserve would not have to hasten plans to tighten monetary policy, sending US markets to record highs today.
- The S&P 500 climbed 1% and the Nasdaq 100 gained 1.1% as the headline rate rose to 6.8%, the highest since 1982, as forecast. Meanwhile, the yield on the 10-year treasury dipped to 1.49% as traders cut bets on the Fed's tightening pace.
- After Fed's Powell stated the central bank might explore withdrawing stimulus at a faster pace, investors were looking forward to the inflation data and a meeting of the Federal Reserve next week for signals on the pace of tapering and interest rate increases.
- The report comes as markets grapple with the threat of the Omicron virus. As virus cases and hospital admissions rise, the US appears to be on the verge of a holiday crisis. Similarly, London firms have told tens of thousands of workers to work from home.
- Nonetheless, consumer morale in the US has been rising, with one indicator indicating an improvement in confidence from a decade-low in November. Gold rose while the dollar fell.
- Separately, the chairman of China Evergrande Group, Hui Ka Yan, was forced to sell pledged shares in the company, according to disclosures made a day after the developer was officially declared a defaulter for the first time.
