Thursday's Market Minute: Higher For Longer Drumbeat Grows Louder

The message was clear at the ECB Forum on Central Banking in Sintra, Portugal on Wednesday. Central bank policymakers stressed the importance of getting inflation back to target levels and their resolve in terms of raising rates this year in an effort to do so. We heard from FOMC Chair Jerome Powell, who said he doesn’t see us getting to the target this year or next and that a strong majority of Fed officials are calling for two more rate hikes before the end of the year.

The ECB President Christine Lagarde talked about how persistence is still necessary to bring inflation down, and the BOE’s Andrew Bailey pointed to the strength of underlying prices behind the commitment to the higher rate environment in the U.K. While in stark contrast to the majority of the panel, the BOJ’s Governor Ueda said while inflation is still below 2% in Japan, there are signs it will increase into next year, and if so he’s willing to act.

Investors and traders are largely shrugging off the higher for longer narrative this morning and focusing on better-than-expected guidance from Micron (MU) and strong economic data, suggesting those who have been predicting a recession have been a bit premature as labor conditions here in the U.S. suggest it’s still a ways off, if coming at all.

Today keep an eye out for GDP due out at 8:30am ET as well as weekly Jobless Claims. Tomorrow, we have Personal income and Spending data due out — a closely watched inflation gauge for the Fed — Chicago PMI, and Consumer Sentiment, all of which could move markets.

 In terms of companies to watch, I mentioned Micron (MU), but we also have a Disney (DIS) downgrade at KeyBanc, and some news related to the Overstock (OSTK) acquisition of Bed Bath and Beyond making headlines this morning.

Looks like a busy end to the week – trade well.

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