TechFlow News: On February 13, according to JINSHI Data, Phil Orlando, Chief Equity Strategist at Federated Investors, stated that the U.S. January inflation report came in better than expected—particularly on a nominal basis… This is good news for the Federal Reserve and supports our long-term view that the Fed will be able to cut interest rates three times within roughly one year as leadership transitions from Powell to Waller. Why did markets decline on Wednesday despite strong labor market data? Because investors viewed such robust labor market performance—far exceeding expectations for January—as unfavorable for the Fed’s path toward rate cuts. Today’s inflation data, however, came in better than anticipated, and we believe the downward trend in inflation will persist. Both bonds and stocks rose—at least reflexively—on the news, with markets interpreting this, over the longer term, as providing the Fed with a sound rationale for lowering interest rates—a positive development.
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