Economists are expecting the US consumer price index (CPI) to show a 0.4% increase in January, translating into 6.2% annual growth, according to a Dow Jones survey.[0] Excluding food and energy, core CPI is projected to have risen by 0.3% on a monthly basis, to 5.5% annually.[0]
Richmond Federal Reserve President Tom Barkin said in a Bloomberg television interview that he expects inflation to have “a lot more persistence” than everyone wants, while Wells Fargo & Co. economists Sarah House and Michael Pugliese wrote that “getting back to an inflation rate the Fed can live with on a sustained basis will neither be quick nor painless.”
The rate on 6-month T-bills rose above 5% on Tuesday, a level last seen in 2007, after the US January’s consumer price index report revealed signs of sticky inflation that’s likely to keep the Federal Reserve hiking rates for longer than expected.[1]
Data released on Tuesday showed the annual headline CPI inflation rate slowed to 6.4% in January from 6.5% in December, the lowest level in 15 months, but still above the 6.2% median estimate of economists.[2] The increase in the core reading – which strips out particularly volatile items like food and energy – tapered to 5.6% over the past 12 months from 5.7%, though still also came in above expectations.[3]
Oil prices fell Tuesday, weighed by the plans of the US government to release more oil from its strategic reserves.[4] The yield on the 10-year Treasury advanced to 3.727% from 3.716% Monday afternoon.[3]
Palantir Technologies (PLTR) stock soared more than 21% after the data software company reported fourth-quarter net income of 1 cent per share – the first profit ever for the firm – compared to a per-share loss of 8 cents in Q4 2021.[5] The revenue increased by 18% compared to the same period last year, amounting[6]
Fed Chairman Jerome Powell has acknowledged the presence of “disinflation” in the US economy and while inflation may not yet be worsening on an annualized basis, it remains more than three times too high for the Fed’s liking.[7]
The cost of living rose 0.5% in January on a monthly basis, the biggest increase in three months, in a sign that inflation is remaining stickier than expected.
0. “Fade The CPI; Here’s What Matters To The Fed, S&P 500” Investor’s Business Daily, 13 Feb. 2023, https://www.investors.com/news/economy/fade-the-cpi-inflation-report-what-matters-to-the-fed-sp-500
1. “Dow Jones Futures: Market Rally Shrugs Off Hot Inflation, Tesla Runs; Airbnb Flies On Earnings | Investor’s Business …” Investor’s Business Daily, 14 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-market-rally-shrugs-off-hot-inflation-tesla-runs-airbnb-flies-on-earnings
2. “January CPI may challenge assumptions about inflationary risk” Axios, 14 Feb. 2023, https://www.axios.com/2023/02/13/inflation-january-cpi-preview
3. “6-month T-bill rate finishes above 5% for first time since 2007 after January CPI data” MarketWatch, 14 Feb. 2023, https://www.marketwatch.com/story/treasury-yields-ease-ahead-of-u-s-inflation-report-d5cd48b7
4. “U.S. CPI, BoJ Governor, Palantir, and SPR release – what’s moving markets By Investing.com” Investing.com, 14 Feb. 2023, https://www.investing.com/news/economy/us-cpi-boj-governor-palantir-and-spr-release–whats-moving-markets-3002601
5. “S&P Futures Tick Higher Ahead of Key U.S. Inflation Data” Barchart, 14 Feb. 2023, https://www.barchart.com/story/news/14179822/s-p-futures-tick-higher-ahead-of-key-u-s-inflation-data
6. “Stock Market Today: Stocks Struggle for Direction After Inflation Data” Kiplinger’s Personal Finance, 14 Feb. 2023, https://www.kiplinger.com/investing/stocks/stock-market-today-021423-stocks-struggle-for-direction-after-inflation-data
7. “Inflation data will test ‘disinflation’ optimism: What to know this week” Yahoo News, 12 Feb. 2023, https://news.yahoo.com/stock-market-week-ahead-consumer-price-index-inflation-retail-sales-172419890.html