January’s CPI data came out higher than expected Tuesday, sparking a major market sell-off. SEI Chief Investment Officer Jim Smigiel joins Yahoo Finance Live to discuss what prompted the sharp downturn in stocks.
Smigiel says the sell-off represents “the market pricing out perfection”. Investors had previously hoped for the Federal Reserve to cut interest rates by March amid stabilizing economic data. However, Smigiel notes the hot CPI report showed “this is not going to be a linear path, this is going to be a bumpy road” to the Fed’s rate cuts.
Smigiel notes markets were “definitely overbought”, but this doesn’t necessarily signal “the start of a bad market”. Rather, it indicates an “entrenchment” in overbought sectors.
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