Stocks Fall as Data Fuel Debate on Fed’s Next Move: Markets Wrap
- Inflation tops forecasts; jobless claims jump to a year high
- Three Fed officials shrug off CPI report, Bostic open to pause
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Stocks fell after data showed hotter-than-expected inflation and a slowdown in the labor market, amplifying the debate on whether the Federal Reserve will opt for a smaller rate cut next month or a pause after a large September reduction.
Following a rally to all-time highs, the S&P 500 took a breather. While Thursday’s economic figures were not perceived by Wall Street as catastrophic, they certainly highlighted the Fed’s challenge of bringing inflation back to the 2% target without cooling the jobs market too much. And that has added to the debate about the Fed’s next steps. For now, bond traders continued to bet the central bank will reduce the pace of cuts to 25 basis points in November.