Higher-than-expected inflation in Jan. likely pushes back interest rate cuts by the Federal Reserve by a little bit. Before last month’s inflation reading, we looked for the Fed to make a small cut at its May 1 meeting. Now, its June meeting looks like a better bet. While the overall trend in inflation is still down, price gains aren’t moderating as fast as the Fed would like. It will want to see more progress first. The bigger picture remains the same: Only a modest drop in rates this year, despite persistent hopes on Wall Street for more and faster cuts. Too many investors have declared inflation beaten too soon…one cause of the recent run-up in stocks.

– The Klipinger Letter
Reported from Washington, D.C. • kiplinger.com • Vol. 101, No. 7 https://kiplinger.com