Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon, today is Wednesday, January 15th, and I'm your host, Kim Kong.

Our top story so far. Some good news for Doves finally arrived. The December consumer price index showed some core retail disinflation.

Market reaction was quick and decisive, with stocks jumping and treasury yields tumbling. And the

anticipated first Fed cut this year was pulled forward to July from September. But the numbers

weren't exactly the nails in the inflation coffin. Headline CPI rose as expected of 0.4% last month, with the annual rate moving up to 2.9%.

Core CPI rose 0.2%, lower than the 0.3% forecast, and the annual rate unexpectedly ticking down to 3.2%.

Seeking Alpha analysts Justin Purrhyt said the figures appear consistent with the cautious stance noted by Chairman Jerome Powell and policymakers like Tom Barkman, and strengthens the case for a more gradual pace of rate reductions.

This suggests that any cuts are more likely to occur in the second half of the year, rather than the earlier timeline some observers have anticipated.

Wells Fargo economists say the progress in the fight against

inflation has seemed to effectively stall in recent months, with the core CPI three-month rate of

3.3 percent, little different than the six-month and 12-month rates of 3.2 percent, as deflation

and core goods has faded since the summer and offset the frustratingly slow pace of services disinflation.

Adding to that more resilient labor market data, and they are lowering their Fed expectations

to two 25 basis point cuts this year, September and December, down from three.

ProHitt added that the California wildfires could contribute to an upticket inflation in 2025, driven by factors

such as higher insurance costs and recovery efforts. So why the big market reaction? It seems the market

is as data dependent as the Fed claims to be. The S&P and Dow are up 1.5% and the NASDAQ is up 2%, and the 10-year

treasury yield is down near 4.65% after pushing up against

4.8% just the session before. On the equity side, it's likely relief that macro factors won't

be derailing the still-strong AI trade anytime soon. For treasuries, such as sizable tumble in

yields, suggests that traders outkick their coverage on bets for higher

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