Here's Why the Latest Inflation Data Was Good News for Fed Chair Kevin Warsh and the Stock Market
The rate of inflation just slowed down for the first time in three months.
Overview
On May 15, Jerome Powell's term as Chairman of the U.S. Federal Reserve ended. He handed the reins to an experienced successor, Kevin Warsh, who previously worked on Wall Street and at the White House and even served five years on the Fed's Board of Governors from 2006 to 2011.
Warsh stepped into the chairmanship at a crucial moment for the American economy. The Consumer Price Index (CPI) measure of inflation rose at an accelerating pace in March, April, and May, driven by soaring oil prices amid the ongoing war in Iran. This forced Warsh to adopt a hawkish stance from the outset, warning Wall Street that interest rate hikes might be on the table.
Details
The last time the Fed raised interest rates, the S&P 500 (SNPINDEX: ^GSPC) stock market index plunged into bear territory, so investors are understandably on edge. But on Wednesday, the U.S. Bureau of Labor Statistics released its June CPI report. Here's why it was good news for both Warsh and the stock market.
Source
Originally published at www.fool.com.