Stocks flash bullish signal as inflation to roll over by summer: Fundstrat

That could bring downward pressure to 48% of the consumer price index, and suggest that over 80% of the CPI is facing disinflationary pressures, Lee estimated.

"Our base case framework is that inflation will soon roll over hard over the summer," he wrote."The forward indicators argue a steep drop is coming.", prompting Fed officials to hike interest rates over 1,700% to tame high prices. That weighed heavily on stocks, with the S&P 500 slumping 20% last year.

Markets are expecting the Fed to raise interest rates another 25 basis-points at their next policy meeting, and officials have suggested rates could stay restrictive all year as high prices still remain a threat. Still, a pullback in inflation could ease pressure on firms and lead the central bank to dial back rates, which Lee previously said could jumpstart a new bull market for stocks.

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