Global stocks continued to rise last week, despite starting the week on the backfoot. Investors overcame the turbulence caused from disappointing outlooks from big tech companies, gaining momentum on the hope of a smaller FED rate hike and signs that inflation is starting to be controlled.

Tech stocks and Nasdaq 100 had their best week since November, despite worrisome results from Microsoft Texas instruments and especially Intel Corp.

Traders were comforted following data showing that spending fell, and the Fed’s preferred inflation indicators slowed in December to their lowest annual pace in over a year.

The central bank pays particular attention to long-term perspectives since they can cause expectations to become self-fulfilling and drive-up prices. Despite acknowledging that the economy is at risk of entering a recession, Treasury Secretary Janet Yellen said she is heartened by recent data on inflation and employment.

Kara Murphy at Kestra Investment Management is more conserved on their opinion: “The market has been rallying on the idea that inflation is whipped. But I’m not so sure it’s settled yet. When you think about how monetary policy works, it’s generally slow. Imagine trying to turn the Titanic way in advance of the iceberg — you have to start long before the iceberg is right in front of you, and you can’t always be sure how the economy is going to react.”

The expectation that the Fed will cut interest rates at the end of 2023 is “a step too far,” according to Erick Muller, head of product and investment strategy at Muzinich & Co. However, hopes are high that the Fed will deliver a 25 basis-point increase on February 1 to move away from last year’s larger moves. Muller predicted that the Fed would announce that it was “approaching the final phase,” but “listen carefully guys: we will continue to raise rates.” The future course of inflation will determine how volatile rates will be.