Wall Street meanders higher after CPI report, crude slides
By Stephen Culp
NEW YORK (Reuters) -U.S. stocks inched higher in choppy trading on Tuesday and the dollar dipped after a crucial report showed sticky U.S. inflation continues to meander along its slow, downward path as the Federal Reserve gathers for its December policy meeting.
Crude prices tumbled over worries of softening global demand, although the U.S. economy appears robust enough to withstand the Fed's restrictive policy, for now.
The three major U.S. stock indexes fluttered in choppy trading before turning modestly higher, putting them on track to notch fresh closing highs.
The Labor Department's Consumer Price Index (CPI) unexpectedly inched higher on a monthly basis in November, but edged lower on an annual basis, stoking concerns that inflation is taking longer to return to the Fed's 2% target than many had hoped and raising the possibility that the central bank will keep policy rates in restrictive territory for longer than anticipated.
«There’s something for everyone in this release,» said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina.
«If you want to believe that inflation is reigniting, there are elements of the report that support that.» Ladner added. «If you want to believe inflation is cooling, you can find things in there to support that too.»
«We’re getting a middling reaction to a middling number.»
The Federal Open Markets Committee (FOMC) convenes today for its two-day monetary policy meeting, which is expected to culminate in a decision to leave the Fed funds target rate at 5.25%-5.50%.
The Fed is also expected to release its Summary Economic Projections and dot plot, which should shed light on the central bank's path forward.
«I'm expecting a dovish
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