Inflation Reads Higher Than Expected Ahead of Fed Meeting

The Federal Reserve is closely monitoring inflation data as it prepares to meet next month and likely raise interest rates by another quarter of a percentage point.[0] Markets expect that the Fed will raise rates twice more this summer, pushing the benchmark rate to above 5% before peaking in July.[0]

The Producer Price Index (PPI) and Consumer Price Index (CPI) will be released at 8:30 ET and 8:30 ET respectively. The PPI is expected to rise 0.4% for the month and 5.4% for the year, while the CPI is expected to rise 0.5% for the month and 6.2% for the year.[1]

The Commerce Department’s Retail Sales for January will be published at 8:30 ET.[0] An increase of 1.7 percent is the consensus, as opposed to the 1.1 percent decline in December.[2]

On Monday, stocks rose on expectations of the CPI release, with the Dow Jones Industrial Average up 20 points, the S&P 500 down 4.95 points and the Nasdaq 100 up 15 points.[1]

The latest inflation read came in a little hotter than expected.[3] The consumer price index for January increased by 0.5% from the previous month and was 6.4% higher than the same period of the year prior[4] Economists estimated that the Consumer Price Index (CPI) rose by 0.4% in January, leading to an annual increase of 6.2%.[3] Core CPI, which excludes energy and food, rose 0.4% and 6.2%, respectively, also exceeding expectations.[1]

The higher-than-expected inflation read may have spooked investors into thinking the Fed will keep up its aggressive campaign against price increases.[3] This could lead to further rate hikes, so investors will be watching the CPI and PPI data closely.

0. “Retail sales, Cisco earnings, Shopify results: 3 things to watch By” Canada, 14 Feb. 2023,

1. “Producer prices, Applied Materials, Constellation Energy: 3 things to watch By”, 15 Feb. 2023,

2. “Wall Street Might Open Broadly In Negative Territory” RTTNews, 15 Feb. 2023,

3. “5 things to know before the stock market opens Tuesday” CNBC, 14 Feb. 2023,

4. “The Club’s top 10 things Tuesday: CPI, volatile market, oil dips” CNBC, 14 Feb. 2023,