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Market Watch Weekly | June 25, 2021 | All Aboard The Bandwagon. Allez les Habitants!

Erik Dekker - Jun 25, 2021

If you only skimmed the headlines the past few weeks, you were likely left with a sense that the market had hit a rough patch, triggered by a shift in the Fed's policy outlook. The reality, however, has been quite different. North American benchmarks rallied to fresh records highs this week as the U.S. core consumer price index (inflation) rose 0.5% for the month, which was below the 0.6% estimate. The core personal consumption expenditures price index increase reflects the rapid pace of economic expansion and resulting price pressures, and amplified how far the nation has come since the pandemic-induced shutdown of 2020. Strategists say this reading provided support to the Fed’s argument that inflation is transitory and will help allay fears that we are witnessing runaway inflation. Naturally, transitory inflation provides support to risk assets such as equities.

 

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