Yesterday the latest CPI came out and the year over year inflation rate came in at 6.5% which is quite a bit lower than the last number reported so inflation is definitely trending down but what does this mean for stock prices? Although inflation is coming down Chairman Powell of the Fed has said on numerous occasions that the Fed will not ease off until inflation meets their target of 2%.
In other words rates will continue to go up albeit at a smaller pace than last year but could high remain high for a long period of time. What this means for the economy is that companies and consumers will all be operating with the burden of high interest rates which means a difficult time for everyone and slower economic growth and possibly a recession.
With this scenario in view, most companies will most likely be reporting lower earnings and consequently their share prices will tend to go down.
As far as buying stocks, I would be cautious at least for the next few months.