The market made a big splash yesterday as soon as the CPI figures were reported at 7.1%, with some claiming that they were leaked half an hour before the scheduled release time. Today, it's the turn of the Federal Reserve to either stay put with their decision at a rising interest rate of 75 basis points as previously planned, 50 basis points as forecasted by the market, or even lower as forecasted CPI was lower at 7.3% and the Fed may be dovish because of it. Somewhere along the road, the market forgets that the results are a long way from the targeted 2%. The last time the market records a negative CPI figure is when the pandemic hits, and many investment vehicles suffer.

EQUITY

The S&P 500 opened 2% higher after the CPI report but returned to just a 0.73% gain on Tuesday. The Dow Jones Index reacted the same as the market realized that inflation is still high, even though it is lower than forecast. FTSE Euro is up by 1.2% as UK CPI reads lower than forecasted at 10.7%.

OIL

USOIL recovered 2.5% for two consecutive days after a 10.8% drop last week. It may be a result of the Canada-US pipeline disruption restricting supply, market perceptions of inflation's impact on oil prices, and hedging activities ahead of the Federal Reserve meeting.

GOLD

High inflation of 7.1% pushed the gold price 1.65% higher as the US Dollar Index was 0.95% lower. The dollar is expected to appreciate further if the Fed decides to keep rate hikes below 50 basis points because of recent lower inflation data.

CURRENCY

After a sharp drop overnight due to lower-than-expected inflation data, the US dollar stabilized in early European trade Wednesday ahead of the Federal Reserve's rate decision. EURUSD increased by 0.89% to 1.06315, GBPUSD increased by 0.82% to 1.23645, and USDJPY decreased by 1.5% to 135.594.