Hot CPI Report Could Rattle Fed as Higher Nominal Growth Lifts Equities
Updated
Updated · Bloomberg · Aug 10
Hot CPI Report Could Rattle Fed as Higher Nominal Growth Lifts Equities
1 articles · Updated · Bloomberg · Aug 10
Summary
Wednesday’s CPI report could create problems for the Federal Reserve if inflation comes in hot, Morgan Stanley Investment Management’s Jim Caron said.
A stronger inflation reading would complicate the Fed’s policy path by clashing with markets that have been supported by higher nominal growth.
Caron said that same nominal growth backdrop is helping drive equity prices higher, leaving investors focused on whether inflation pressure undercuts that support.