11 July 2019

Lower prices for gas were offset by higher rents and auto prices, although the core inflation rate was at the Fed’s target of 2.1%.

While the Fed pointed to low inflation as a reason for possible rate cut, the relatively strong core inflation could slow down the reduction process.

“With the current Dow at 27,000 and S&P at 3,000, they are expecting a deal with China, the Fed to cut rates, and then incomes showing better results than predicted”, – noted Sean Lynch from Wells Fargo Private Bank. “In case something from that list changes, we’ll see a slight slowdown at the market.”

As you know, the Bank of Canada kept its key lending rate at 1.75% on Wednesday. It means the Fed rate (today at 2.5%) may get closer to its northern neighbor’s rate.