Inflation Decrease's Impact on Stock Market: A Closer Look

Deflation in goods prices, particularly appliances, furniture, and used cars, could help bring inflation down to the Federal Reserve's target of 2% by the second half of 2024, according to economists. Morgan Stanley projects that core goods deflation will continue as supply chains improve and demand cools, offsetting price increases for services. They forecast that personal consumption expenditure inflation will drop to 1.8% in September 2024, lower than the Fed target and earlier than expected. However, the prices for food and services continue to increase as consumers spend more on experiences and travel, with credit cards being the preferred method of payment for leisure travel expenses.