Scott Martin, an analyst at Astor Asset Management, told CNBC’s “Squawk Box” that Tuesday’s Consumer Price Index report means the Federal Reserve will hold interest rates steady.
The CPI rose 0.4% in April, slower than the 0.5% expected increase. The core index, which strips out energy and food prices, increased 0.2%, in line with expectations but above March’s 0.1% increase.
“This is exactly what the market wanted to see,” Martin said Tuesday. “The key thing going forward is that the market sees no movement on the Fed, especially higher. Now you’re seeing the market trade up. I think you can look at 1510 today and maybe all-time highs later in the S&P.”
He said the market needs stability to move higher.
“The market does best when the Fed isn’t doing anything – when rates are steady,” Martin said. “That’s the key. We don’t like fluctuation. I personally thought the risk this year was another rate hike. It looks like the Fed is doing what they said they’d do – keeping things steady in the near term.”