Financials Move Higher on Tame Inflation as Stimulus Approval Nears

This post was originally published on this site – Banking and financial shares were up in Wednesday’s trading as data showed that inflation remained tame last month. 

Wells Fargo (NYSE:WFC) shares were up 3%. Citigroup (NYSE:C) shares rose 2.6%, while those of Bank of America (NYSE:BAC) rose 2.2%. JPMorgan Chase (NYSE:JPM) shares gained 1.3%.   

The consumer price index rose 0.4% in February, in line with expectations. It had risen 0.3% in January.

Concerns over higher inflation, a possibility given the unprecedented printing of money by the U.S. Federal Reserve, just like other central banks all over the world, have driven bond yields higher last few weeks.

The Treasury Department has printed roughly $3.6 trillion of new government debt in the past year to shore up the economy that was roiled by the Covid-19 pandemic, CNBC said in a report.

The $1.9 trillion fiscal stimulus package, expected to get the House Democrats’ approval on Wednesday, will add more money in the hands of individuals qualified by income. Investors expect these people to line up at retail stores, restaurants and entertainment parks to spend their  stimulus checks. Fear that this increased spending will stoke inflation is keeping investors nervous.