From our colleagues at our sister company, Argent Trust:
Announced this morning, the Consumer Price Index increased 0.4% in April, as expected and higher than the previous month. It grew 4.9% on an annual basis. Monthly prices for Used Cars and Trucks, up 4.4%, and Gasoline, up 3.0%, were relatively strong, while monthly prices for Utility gas service (natural gas), down -4.9%, were weak. The core rate, which excludes prices for food and energy, increased 0.4% in April, as expected and the same as the previous month. It increased 5.5% on an annual basis, a slightly lower annual level than the previous month.
Overall, inflation measures came in as expected, but stay elevated as monthly figures continue increasing and annual figures are still well above the Federal Reserve’s target. Despite parts of the financial system and economic data showing stress, inflation is sticky and persisting in the system. Furthermore, many companies have reduced future guidance in recent earnings reports, highlighting the difficult environment. The Federal Reserve may be close to the end of rate increases that started last year, but they are likely to keep tight monetary policy in place in the coming months until inflation moves lower and closer to their goal.
In all, the 10-year US treasury yield is lower following the report and equity futures are higher as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.
