[Altos Weekly Traders Edge] Inflation Remains Stubborn...Details Inside

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In economics, the fight against inflation is often likened to squeezing a balloon. It takes concerted effort to shrink one part, but other sections might bulge under the pressure. During the sharp spike in inflation, certain prices ballooned more than others. These include areas like energy and housing, which have a significant weighting in CPI calculations. Now, as those sectors moderate, other costs that initially remained stable begin to tick upwards. This unevenness complicates both the overall inflation story and the Fed's response. The Importance of the Core PCE While the CPI has become the inflation number that captures headlines, the Personal Consumption Expenditures (PCE) deflator is the benchmark primarily utilized by the Federal Reserve. The PCE tends to be a little more stable than the CPI, filtering out price swings in components like food and energy. With core PCE projections lower than recent CPI figures, the markets see some breathing room. Even while acknowledging the recent bump in inflation, there's an expectation that we're edging closer to the target. Rate Cuts: Timing and Trajectory This brings up the delicate dance of cutting interest rates. Aggressive hikes were needed to cool things down, but as inflation fades, the question becomes: How fast and far can the Fed ease without rekindling inflationary pressures? It appears the days of multiple rate cuts are behind us. With both economic slowdown fears and political realities looming over the second half of 2023 (hello, election season!), it's probable that Fed policy changes will become increasingly measured. Perhaps one cut in mid-year, with the potential for two more toward the end of the year – should data cooperate. Market Optimism Confronts "Sticky" Inflation The optimism that ignited markets at the start of this year might require some tempering. Corrections were to be expected, particularly following the hotter-than-expected inflation reading. We might be closer to 2% inflation than last year, but the final push will prove "stickier" than some investors assumed. Prices tend to move upwards swiftly but are reluctant to come down equally fast. While some categories (like rent) are clearly starting to soften, others haven't begun their decline. Service inflation, particularly wages, poses a challenge, given the tight labor market. The Outlook We're still headed in the right direction, although likely at a slower pace than many hoped. There's less risk of a severe inflationary storm and a greater chance of achieving a soft landing. But brace yourselves for some twists and turns along the way – markets will probably have to grapple with fluctuating figures that paint a somewhat mixed picture. While reaching the ultimate 2% inflation target could take longer than initially hoped for, the fear of a return to 1970s-style runaway inflation looks far less likely. - The Team at Altos Trading Sponsor [Investing Wizard Who Turned $37K Into $2.7M in Just 4 Years Makes His Next Big Move]( He started from nothing and became a multimillionaire... He's now one of the most sought-after trading experts... Yet he operates 858 miles from Wall Street. And now, he's revealing his #1 favorite strategy that targets MASSIVE weekly profits with just one stock ticker. [SEE THE PROOF HERE]( Missed our action-packed Live Weekly Market Review on Tuesday? Fear not! Here's your whirlwind recap. This week, we turned into cartographers, with Market Overview - Mapping Out Key Levels. These zones act as the market's terrain, guiding its movements. Next, we explored the 36-Month MA, revealing the broader trends shaping long-term market direction. Ready to tackle price action? 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Trading securities and options involves risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade securities and options, and must meet suitability requirements. Past results are not necessarily indicative of future performance. Performance figures are based on actual recommendations. Due to the time critical nature of trading, brokerage fees, and the activity of other subscribers, there is no guarantee that subscribers will mirror the performance of the service. Performance numbers shown are based on trades subscribers could enter based on the trade alerts. Altos Trading, LLC assumes no responsibility for any losses incurred by any individual or entity as a result of trade alerts or strategies taught through courses or coaching services. 7154 W State Street Suite 169 Boise Idaho 83714 USA [Unsubscribe]( | [Change Subscriber Options](