CEO of ProfitJumpstarter, Keisha Bailey says a rebound in overseas stock markets is likely as inflation begins to cool off in the United States.

Speaking on Taking Stock with Kalilah Reynolds, Bailey noted that core inflation in the United States, which does not include volatile items such as food and energy, slowed to 5.3% in May.

This is the lowest inflation has been in the country since November 2021, having peaked at 9% in the summer of 2022.

“So inflation finally looks like it’s trending a little lower in the US, which is good. Finally we’re starting to see some reprieve in inflation numbers in the US,” Bailey said.

She added that the positive inflation data also prompted the US Federal Reserve to halt interest rate hikes for the first time in 18 months. 

At its latest policy meeting, the Fed said it will hold interest rates at the current range of 5-5.25%. According to the United States’ Central Bank, the slowing inflation rate coupled with positive jobs data was a signal that it was a good time for rate hikes. The agency did note, however, that at least two additional hikes could be possible before the end of the year.

Despite that, Bailey noted that the news sparked a rally in US stocks with any prices skyrocketing.

“A lot of companies’ prices have gone up now, very quickly. So, because of that, we’re slowly entering into a period of rebound and so money is out there to be made,” the Wealth Coach said.

She explained that stable inflation is very beneficial for companies. 

“Because now they can expand production, and they have more certainty about future prospects and future strategies. So companies tend to push out more and we see more profits in a stable inflation environment,” she added. 

As it relates to Jamaican investors, Bailey said this positive news in America will have a spillover effect in the Jamaican market.

“A lot of the weakness we’ve been seeing in the Jamaican market as well is due to what’s happening with inflation. There is less disposable income to be able to go after investments,” she explained. 

Jamaica’s inflation rate for May fell to 5.8%, which is just below the Bank of Jamaica’s upper limit for target inflation. The BOJ’s target inflation range is 4-6%. 

“So as inflation continues to cool, we will see the effects in the Jamaica market, with prices start picking up later on this year,” Bailey said.