The Consumer Price Index climbed 0.5% in July. That was in line with Wall Street expectations. And down from the 0.9% gain in the inflation index reported for June.
That was enough to send stock prices higher as investors and traders decided the data supports the Federal Reserve’s view that the recent spike in inflation will be temporary.
Year over year the Consumer Price Index is up 5.4%, a 30-year high.
The core CPI, which subtracts volatile food and energy prices, rose 0.3% in the month, slightly below Wall Street projections. Year over year the core inflation rate is up 4.3%.
Today the Standard & Poor’s 500 closed up 0.25% and the Dow Jones Industrial Average gained 0.62%. The NASDAQ Composite was down 0.16% and the small cap Russell 2000 index was ahead by 0.49%.
The yield on the 10-year Treasury rose to 1.33%. That might have been a reaction to comments from Chicago Federal Reserve President Charles Evans who said that the moment when the Fed will start to tighten by cutting bond purchases and raising interest rates is getting closer. No specific “when” from Evans and certainly nothing new or unexpected in those remarks. But the yield on the 10-year Treasury has trended higher recently (which means bond prices have fallen) so these words might have ben enough of a reminder of the obvious to move bonds prices.
