US stocks are lower after hot inflation and claims data kept the risk of more Fed rate hikes on the table. The labor market refuses to break and that
will keep supporting the Fed’s ‘higher for longer’ stance on rates. Wall Street is buying up safe-haven trades that include Treasuries, the dollar, and mega-cap tech and oil stocks. King dollar is ready to give up the crown until Wall Street is confident that the Fed is done raising rates. CPI/Claims The US inflation report came in a little hotter-than-expected. Inflation is still coming down and that should allow the Fed to stay on the ‘higher for longer’ course.
Oil prices pared gains after a somewhat hot CPI report suggested the Fed might not be done raising rates. A strong dollar emerged and that put some pressure on commodity prices. The oil market is going to remain tight going forward and should see the mid-$80s provide major support. The risks of strong enforcement on Russian oil price caps or potential deepening of sanctions of Iranian crude will likely keep this oil market tight throughout the winter.
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