Inflation pressures show no signs of abating after the fastest annual increase since 1982, adding to pressures for a big rate hike from the Federal Reserve next month.
U.S. inflation accelerated to the fastest pace in four decades last month, data from the Bureau of Labor Statistics indicated Thursday, with underlying figures showing no signs of near-term relief for pinched American consumers.
The headline consumer price index for the month of January was estimated to have risen 7.5% from last year, up from the 7% pace in December and the fastest rate since June of 1982, powered largely by airfares and rental costs. On a monthly basis, inflation was up 0.6%, the BLS said, with both tallies topping Wall Street forecasts.
So-called core inflation, which strips-out volatile components such as food and energy prices, rose 6% on the month, and 6% on the year, the highest since February of 1991, the report noted, with the annual reading coming in ahead of the Street consensus forecast.
White House Press Secretary Jen Psaki told reporters during her regular media briefing Wednesday that President Joe Biden was “expecting a high year-over-year inflation rate” from the January data, but added that “leading outside forecasters continue to project that inflation is expected to decrease over the course and moderate over the course of this year.”
Stock Market Today -2 /10: Stocks Mixed As Disney Soars, Inflation Roars
U.S. stocks reversed earlier gains in the wake of the data release, with futures tied to the Dow Jones Industrial Average indicating a 150 point opening bell dip and those linked to the S&P 500 priced for a 38 point move to the downside.
Benchmark 10-year U.S. Treasury bond yields, meanwhile, rose to 1.981%, with futures tied to the tech-focused Nasdaq indicating a 205 point opening bell decline.
The CME Group’s FedWatch tool is showing a 25% chance of a 50 basis point rate hike in March, up from just 7.3% at the beginning of the year. The Atlanta Federal Reserve’s GDPNow forecasting tool, a real-time benchmark, suggests U.S. economic growth has slowed to a 0.7% clip.
