What is the stock market inflation report and what does it mean?


The latest release of the Federal Reserve’s “Beige Book” includes an inflation report. The report shows that the CPI increased by 2.6% in December, more than expected and above the target range of 2% to 2.5%. The Fed has been raising interest rates in order to tamp down on inflation, but it appears that they may have hit a ceiling in terms of how far they can go without causing a recession. When the Fed raises interest rates, it also raises the prices of all other things that people buy, including stocks. As a result, Stock market inflation is often measured by the rise in stock prices. The CPI is a measure of what consumers are actually paying for goods and services.



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