Market Insights, Two the Point

Two the Point — Falling Inflation, Growing Opportunities

Andrew Davis, CFA®

Bryn Mawr Capital Management

< 1 min read

July 18, 2024

Two the Point

The recent Consumer Price Index (CPI) and Producer Price Index (PPI) data indicate a significant easing in inflationary pressures, setting the stage for potential rate cuts by the Federal Reserve and an optimistic outlook for the markets.

Key Insights:

CPI Data: June showed an annual increase of 3.0%, and core CPI (excluding food and energy) increased by 3.3% year-over-year, reflecting contained inflationary pressures.
Federal Reserve Outlook: In the June Summary of Economic Projections (SEP), the Fed’s median forecast for core Personal Core Expenditures (PCE) inflation in Q4 2024 was 2.8%. With recent data tracking below this forecast, there is a strong case for the Fed to lower their projections in the September SEP, potentially setting the stage for rate cuts.
Market Implications: We anticipate a series of rate cuts, starting with a 25-basis point reduction as soon as September. The Russell 2000 recently surged by over 3%, indicating a positive shift in investor sentiment towards smaller and mid-cap stocks.

Andrew Davis, CFA®

Bryn Mawr Capital Management

Andrew Davis leads a team that analyzes broad economic trends and factors that impact global and national economies. He joined the company in 2019.

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