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[hfe_template id='11223'] [ad_1] Wall Street rallied sharply and Treasury yields fell on Wednesday as investors bet that the Federal Reserve will look through rising price pressures and continue cutting interest rates this year, after new projections showed that officials now expect lower growth and higher inflation. While the median projection of two more rate cuts this year is still policymakers' base case, the underlying 'dot plot' forecasts shifted up closer towards only one. But not quite. Investors ignored that, however. They also ignored the growing "stagflation" risks and officials' admission that uncertainty is elevated. Instead, they seized on Chair Jerome Powell's belief that tariff-driven inflation will be "transitory" and largely confined to this year. I will dig deeper into the confusing signals sent by various measures of inflation expectations below. But first, here are the scores on the doors from Wednesday's...

[hfe_template id='11223'] [ad_1] The Nasdaq scored a record closing high on Tuesday and the S&P 500 and the Dow also advanced as Federal Reserve Chair Jerome Powell reassured investors while they digested Tuesday's data and waited for Wednesday's crucial consumer inflation report. U.S. producer prices increased more than expected in April as the cost of services and goods rose sharply, leading traders to pare back bets of a first rate cut in September. But Powell on Tuesday described the producer price index report as more mixed than hot given that prior-period data was revised lower. Investors were also encouraged by Powell's comment that he did not expect the central bank's next interest rate move to be a hike, despite a recent run of higher-than-expected inflation. "The market is getting more comfortable with higher-for-longer rates. The real question has been lately if a hike is a possibility and Powell's reiterating that it's not o...