A Stubborn inflation fails to phase the markets.

Hey, Peter Navarro here with this week's market wrap for the week ending March 1st, 2024.

The S&P 500 had another up week breaching 5100.

Propeled by the AI revolution, nothing seems to phase this market,

even bad news on the inflation front.

The biggest bad news came out on Thursday when the Federal Reserve's favorite gauge of inflation,

the Personal Consumption Expenditures Index,

came out at as fast as pace in four months. index

The PCE index rose 0.3% above expectations. The more important core PCE rate, at least when it comes to the Fed's setting interest rate,

strips out food and energy prices.

It rose even faster at 0.4%, marking the largest increase in a year.

Lightning quick digression, economists usually strip out food and energy prices on the assumption of

volatility and they usually such prices fall back down.

Not such a great assumption when you are on a low income trying to buy gas

to get to work and food for your family,

but that is the skinny.

The spike in the PCE was not a particularly big

surprise so there was not much of a market reaction both consumer and wholesale

prices that feed into the PCE index were up sharply last month.

But the big overriding debate here, of course, is about how quickly the Federal Reserve might begin to start cutting interest rates. The Fed's benchmark short-term

interest rates still stands at its peak of 5.5%. Right now a majority of market sentiment has the Fed rate cutting Bonanza starting in June

with another two rate cuts likely by the end of the year.

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