After the new year started with volatility, investors have been calmed by words from the Federal Reserve and hope surrounding U.S.-China trade discussions. There is still plenty to worry about including the continued government shutdown, Brexit, and potential fallout from the Mueller investigation. But for the last week, investors were embracing the positive.
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- Inflation Holding Steady: Last Friday the Labor Department released inflation data showing the consumer-price index was 1.9% for the 12 months ending in December. It was under 2% for the first time since 2017. Prices in December declined 0.1% from November with help from lower energy costs, which we can all see at the gas pumps. The 2% number is significant as the Federal Reserve targets inflation of 2% or less and the numbers will give the Fed reason to not raise short-term rates, which they do to contain rising inflation. This is certainly one reason the markets have been positive of late.