Tax reform worries affecting stocks, Inflation is in question

November 13, 2017

Worries on tax reform along with profit-taking is sending Stocks lower to begin the week as the Dow and S&P snapped an eight-week winning streak closing lower on Friday. Both major political parties have put forth prospective tax bills. The hard part is still to come on a compromise between the two parties. U.S. Stocks will see an abundant economic calendar this week which will give the investing community a broad overview of the U.S. economic landscape heading into the holiday season.

The Federal Reserve members will be closely watching this week’s inflation data from the Consumer and Producer Price Indexes. The Fed has been saying that inflation will rise, but this prediction does not seem to be materializing. The Fed’s favorite inflation gauge, Core Personal Consumption Expenditures, has been moving well below the target 2% level year over year and is currently at 1.3%. Despite low inflation, the Fed is expected to raise the short-term Fed Funds Rate at December’s Federal Open Market Committee meeting. This is the rate at which banks lend to one another overnight.

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