Inflation is proving stickier than expected, which could cause Fed to hit pause button on more interest rate cuts.

U.S. stocks were surging on Wednesday morning as Treasury yields fell after core inflation data came in below expectations, boosting bets that the Federal Reserve will still be able to cut interest rates this year.

Recently, progress on inflation appeared to be stuck or, at worst, reversing: A closely watched gauge of underlying price hikes — an index that excludes highly volatile categories — hadn’t budged for months.

The Dow fell 600 points on Friday morning after new job reports surpassed expectations, and the Federal Reserve indicated that interest rate cuts may be postponed. Additionally, inflation remains a concern and is anticipated to stay high.

Citi—which anticipates five rate cuts in 2025—has a downbeat forecast for a meager 0.7 percent growth. Bank of America is forecasting an above-consensus 2.4 percent growth for the year, hence their view for no rate cuts. ING, meanwhile, expects two percent growth.

A strong dollar makes money earned abroad worth less in dollar terms, raising the possibility that currency-translation effects might cause companies to miss Wall Street's targets for sales and earnings. At the very least, companies would not exceed those targets by as much as they otherwise would have.

The economy was expected to add 153,000 jobs last month, according to economists polled by financial-data firm FactSet. The unemployment rate ... kicking off a flurry of interest rate hikes from the Federal Reserve to tame price increases.

Forecasters surveyed by the data firm FactSet expect that U.S. payrolls grew by 153,000 ... he says, that would be seen by Federal Reserve Chair Jerome Powell as striking a Goldilocks balance, not hot enough to inflame worries about inflation, not cold ...

Collins, in prepared remarks for an event Thursday in Boston, said the economy was in a “good place,” but noted that progress on cooling inflation will likely be slower this year than previously anticipated.

The Fed is expected to slow the pace of rate cuts.

Ten-year Treasury yields were hovering just shy of their highest since last May, and the 30-year yield was close to its highest since November 2023, as investors continued to show concern that President-elect Trump’s import tariff and immigration plans may revive inflationary pressures.