Jun 21, 2021
Equity markets began pulling back last week after the FED Dropped a bomb on the market. The FOMC increased its inflation target, up the timeline for future rate hikes, and sent the market into a tailspin. The S&P 500 shed more than 1% on Friday putting in the index at its lowest level in over two weeks. If the market can't bounce back this week the indices could be in for a much deeper correction. The S&P 500 are trading nearly 22.5 times their forward earnings and well above the 10-year average.
The biggest hurdle for the market this week will come on Friday with the release of the personal income and spending data. Within the report is the Fed's favored gauge of consumer-level inflation the PCE price deflator index. The index spiked to well over the Fed's target 2% rate last month and is expected to be hot again this month.