Stocks tick higher on Wall Street as inflation slows further

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Asian stock markets declined Thursday after the Federal Reserve said its economists expect a “mild recession” this year.

People pass the front of the New York Stock Exchange in New York, Tuesday, March 21, 2023. Stocks are rising on Wall Street, including the banks most beaten down by the industry's crisis. (AP Photo/Peter Morgan– Stocks on Wall Street are ticking higher Thursday following the latest sign that inflation continues to cool.

High inflation and how high the Federal Reserve will hike interest rates to tame it have been at the center of Wall Street’s struggles for more than a year. The Fed has hiked rates at such a ferocious pace over the last year that it’s already slowed parts of the economy and caused strains to appear in the banking system.

High interest rates and still-high inflation are eating away at corporate profits, and the biggest U.S. companies are starting to tell investors how much they earned during the first three months of the year. Expectations are low, with forecasts calling for the sharpest drop in earnings since the pandemic was pummeling the economy in 2020.

The bond market has shown much more worry about a possible recession than the stock market, with traders betting heavily on the Fed having to cut interest rates later this year in order to prop up the economy.

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