Investors renew focus on Fed following signs inflation may have peaked

Investors renew focus on Fed following signs inflation may have peaked

NEW YORK - Data on Wednesday hinted that U.S. inflation may have peaked, reassuring investors that the Federal Reserve will not feel obligated to hasten plans to rein in emergency-level support of the economy, but they remained worried that rising prices could continue to weigh on everything from bond prices to corporate margins. Data showed on Wednesday that U.S. consumer price increases slowed in July even as they remained at a 13-year high on a yearly basis. The S&P 500 and the Dow Jones Industrial Average closed at record levels, while U.S. Treasury yields fell across most maturities. Some investors said the data bolstered the Fed's assertion that jumps in inflation will be relatively fleeting, partly reflecting supply chain bottlenecks that will ease with time. But they added that inflation remains elevated, which can sap profit margins and erode the value of bonds. Other concerns: corporate earnings growth appeared to be hitting a peak; rising coronavirus cases could threaten the economy; and stocks are generally trading at historically high valuations. The inflation data would help the Fed feel a "a little bit more confident that they can let inflation run a little bit hotter in the near term without having