Once again, inflation came in hot for a second straight month.
This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribea record $1.7 trillion last year, according to a new report by British asset manager Janus Henderson.
Investors don't expect that latest data to move the needle on the Fed cutting rates in June. That could be why markets have had a more muted reaction to the news. "We have the numbers we have and this wasn't great news for the Fed but markets don't see it as a big threat to rate cuts later in the year," Kathy Jones, chief fixed income strategist at Charles Schwab,Yet, the hot print poses a problem for the Fed and muddies the water for its deliberations on the coming rate cuts.
"The long-term disinflation trajectory probably has not changed, but the path to the Federal Reserve's 2% target will be choppy," noted LPL Financial chief economist Jeffrey Roach. "Expect to see markets struggle with what this means for Fed policy." There is a lot riding for Wall Street when the central bank meets next week. Investors' main focus will be on whether the Fed will continue to pencil in three rate cuts for this year or will officials decide to change course.
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