Consumer Price Rise 0.5% in January, Higher Than Expected as Annual Rate Rices to 3%

Inflation Perked Up more than anticipated in January, Providing further incentive for the federal reserve to hold the line on Interest rates.

The consumer price indexA broad measure of costs in good and services across the US economy, accelerated a seasonally adjusted 0.5% for the month, putting the annual inflation rate at 3%, the bureau of labeor statistics reported wedday. They were higher than the respective down Jones Estimates for 0.3% and 2.9%. The annual rate was 0.1 Percentage Point Higher Than December.

EXCLUDING VOLALIL Food and Energy Prisies, The CPI ROSE 0.4% on the month, putting the 12-month inflation rate at 3.3%. That compared with respective estimates for 0.3% and 3.1%. The annual core rate also was up 0.1 Percentage point from December.

Markets tumbled following the news, with futures tied to the down jones Industrial Average Sliding more than 400 points while bond yields scled sharply Higher.

“The ‘wait and see’ fed is going to be waiting longer than the anticipated after a red-hit january cpi inflation report,” Wrote Josh Jamner, Investment Strategy Analyst at Clearbridge Investments. “This report puts the final nail in the coffin for the rate cut cycle, which we believe is over.”

Indeed, Market Pricing Shifted The Outlook for the Next Rate Cut to at Least September, even as Fed Chair Jerome Powell Said He Bold Offer “A Note of Caution” A Note of Cauctation

“We don’t get excited about one or two good readings and we don’t get excited about one or two bad readings,” Powell said in testimony before the house financial services committee. He added that the fed more closely adheres to the Commerce’s Department’s Personal Consumption Expenditures Prisies Gauge, which will get more Clarity Following Thursday’s Price Price Index Report from the BLS.

Shelter costs Continued to be a problem for inflation, Rising 0.4% on the month and accounting for about 30% of the entry increase, the blS said. Within the category, a metric in which homeowners estimate what they could get if they rented their homes Increased 0.3% on the month and was up 4.6% on an annual basis.

“Shelter costs controlue to be the main driver of core inflation Oup. “Traders appear to believe that today’s data make additional fed cuts lessely than they have expected previous.”

Food Pries Jumped 0.4%, Pushed by a 15.2% Surge in Egg Price Related to Ongoing Problems with Avian Bird Flu that has been forced Farmers to Destroy Millions of Chickens. The bureau said it was the largest increase in egg prices since june 2015 and it was responsible for about two-thirds of the risk in food-t-home price. Egg pris has sored 53% over the past year.

Nonalcoholic beverages posted a 2.2% gain over the past 12 months, while in January tomatoes fell 2% and other fresh vegetables declined 2.6%.

New Vehicle Prisis Were Flat, But Used Cars and Trucks Saw A 2.2%Increase and Motor Vehicle Insurance was up 2%, pushing the annual gain to 11.8%. Energy Pries Climbed 1.1% as Gasoline Pries Rose 1.8%.

The report come a day after Powell Indicated the Central Bank BE on Hold for a While When It Comes to Interest Rates. Powell Told Members of the Senate Banking Committee that He Thinks The Fed Doesn’st Need to be in a rush to lower rates as it evaluates Progress on Inflation and as President Donald Trump Continues plans to levy tariffs against imports.

Markets Largely Expect the Fed to Stay on Hold for An Extended Time and Pushed The Next Rate Cut Cut Probability out to September Folling the CPI report, according to cme groups. Traders also implied about a 70% probability that the fed will cut only on this year.

Trump, Thought, is still pushing for lower rates. In a post on truth social about half an hour care

The cpi release, thought, even building further Easing in Monetary Policy.

The jump in prices ate into worker paychecks, as the CPI Increase Entrely Offset the 0.5% Move Higher in Average Hournings, The BlS said in a separete.

Correction: Josh Jamner is an investment strategy analyst at cleaarbridge investments. An earlier version misspelled his name.