Jun 22, 2021
Equity markets started the week strong with the S&P 500 Rising more than 1.3% on Monday. It appears the market is shrugging off the fear of rising inflation that was caused by last week's FOMC meeting. Even so, the risk of inflation is still present and this week poses another threat to the rally. The May personal income and spending data is due out on Friday and with it the PCE price deflator.
Core consumer inflation is expected to have subsided by 0.10% over the last month to 0.6%, the risk is that it will be hotter than expected. A hotter than expected number will increase the expectation for future rate hikes and may put a cap on the rally. If the market likes what it sees, however, it could be off to the races with the S&P 500 moving up to set a new all-time high.