US equities rise as investors recover from inflation-fueled selloff

Wednesday saw an uptick in US stock prices as traders sought to recoup losses sustained on Tuesday. Inflation is still likely to decline, according to Federal Reserve official Austan Goolsbee. At the next policy meeting, investors expect the Federal Reserve to maintain current interest rates.

Wednesday saw an uptick in US stock prices as investors sought to recoup losses caused by January's strong inflation data. As the day came to a close, bond rates fell as all three main indices rose slightly.

The Bureau of Labor Statistics reported that consumer prices rose 3.1% year-over-year in January, which was hotter than expected and sent stock prices tumbling on Tuesday.

In remarks delivered on Wednesday, Chicago Federal Reserve President Austan Goolsbee attempted to calm markets by assuaging concerns that inflation was still trending upwards and by asking observers not to place too much weight on a single inflation number.

"Just because inflation is going up slightly doesn't mean we aren't on track to reach 2%," Goolsbee stated in his prepared remarks delivered at Wednesday's Council on Foreign Relations. "We can still be on the path even if we have some increases and some ups and downs."

However, investors were hoping for interest rate decreases earlier this year, but higher prices have tempered market optimism, causing deadlines to be pushed out further.

As per the CME FedWatch tool, the probability that the Fed would maintain current interest rates at the March meeting has increased from 81% one week ago to 90% presently.

In light of this week's inflation report, several experts and pundits have revised their estimates for the first rate decrease to June, if not before.

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