Inflation has been nothing short of disastrous for the last several months now, possibly even the last couple of years, depending on your definition of “disastrous.” But there are signs that the Federal Reserve’s tightening moves are taking hold, and that may at least slow the pace of the outrageous gains we’ve seen on everything from gas to groceries in that time. A look at the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) will offer further insights into the impact this has on the broader market.
The latest word about the Personal Consumption Expenditures (PCE) price index came in, and the news was at least a sign of relief for inflation watchers. The sigh, of course, is a lot more pained from regular consumers as the only thing that happened for them is that prices went up, but slower than they were.
The PCE, which excludes food and energy—two of the biggest expenses for regular citizens—was up just 2.8% against the same time a year prior. It was also up just 0.3% against the month prior, which means the crippling costs of living seen last month are still there. Both of these measures, meanwhile, were in line with what Fed analysts were expecting.
Inflation Still “Stubborn”
It will likely surprise no one that inflation is still running rampant. But even the Federal Reserve is calling inflation levels “stubborn,” noting that “the last mile is harder.” This has the dual effect of not only pointing out that the cost of living is still hurting regular Americans but also dampening hope for a rate cut to finally kick in at some point. While the original projections of three cuts this year are still on the table, each move to hold steady decreases the chance of cutting this year.
Is SPY Stock Worth Buying?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SPY stock based on 395 Buys, 102 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 31.47% rally in its share price over the past year, the average SPY price target of $565.97 per share implies 8.2% upside potential.
