{"id":749,"date":"2023-02-14T09:50:04","date_gmt":"2023-02-14T14:50:04","guid":{"rendered":"https:\/\/embarrdowns.com\/january-cpi-report-to-provide-insight-into-feds-battle-against-inflation\/"},"modified":"2023-02-14T09:50:05","modified_gmt":"2023-02-14T14:50:05","slug":"january-cpi-report-to-provide-insight-into-feds-battle-against-inflation","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/january-cpi-report-to-provide-insight-into-feds-battle-against-inflation\/","title":{"rendered":"January CPI Report to Provide Insight Into Fed’s Battle Against Inflation"},"content":{"rendered":"

Economists are expecting that the Consumer Price Index (CPI) will show a 0.5% increase in January, translating into 6.2% annual growth, according to a survey conducted by Dow Jones.[0]<\/a><\/sup> Excluding food and energy, so-called core CPI is projected to rise 0.4% and 5.5%, respectively.[1]<\/a><\/sup> This would be the biggest monthly increase since October.[2]<\/a><\/sup> Federal Reserve Chair Jerome H. Powell has acknowledged the presence of “disinflation” in the US economy.[3]<\/a><\/sup> However, the strength of the jobs market has worried some Fed officials, who are concerned that the tight labor market will lead to wage rises and will feed inflationary pressures.[4]<\/a><\/sup><\/p>\n

The January CPI report will be closely watched, as it will provide market participants with another reading into how the Federal Reserve is faring in its battle against inflation.[5]<\/a><\/sup> According to the Cleveland Federal Reserve’s “Nowcast” tracker, the Consumer Price Index (CPI) is projected to rise by 0.65% on a monthly basis and 6.5% year-over-year.[2]<\/a><\/sup> The forecast for the core is 0.46% and 5.6%.[6]<\/a><\/sup> A New York Federal Reserve consumer survey showed that expectations for inflation in 2023 were unchanged from 5% in December.[7]<\/a><\/sup> The New York Fed reported that the anticipated rate of inflation three years in the future was 2.7%, while inflation was forecast to be 2.5% five years from now.[8]<\/a><\/sup><\/p>\n

The Federal Reserve has increased rates for eight consecutive times in a period of less than twelve months, increasing by a quarter of a percentage point most recently; this is a slower pace than in nearly all of 2022.[9]<\/a><\/sup> It is predicted that the Federal Reserve will up their benchmark interest rate two times from the current 4.5%-4.75% target range.[6]<\/a><\/sup> This would equate to a further 0.5%, or 50 basis points.[6]<\/a><\/sup> Market analysis suggests that the Federal Reserve will ultimately settle at a rate of 5.18%.[6]<\/a><\/sup><\/p>\n

On Monday, the yield on the 10-year U.S. Treasury dropped to 3.71%. Monday saw a less than 1% drop in oil prices, temporarily halting the significant recovery which had taken place the week prior.[10]<\/a><\/sup> Futures of West Texas Intermediate were trading at slightly more than $79 per barrel.[10]<\/a><\/sup> On Tuesday, yields from the U.S. Treasury decreased as people in the investing world awaited the most recent consumer price index report and assessed the economic outlook. The 10-year Treasury yield was down 2 basis points 3.69%. The 2-year yield dipped 3 basis points to 4.51%.[0]<\/a><\/sup><\/p>\n

0. <\/span>“Nasdaq, S&P futures point up as traders bet on on Valentine’s CPI treat” Seeking Alpha, 14 Feb. 2023, https:\/\/seekingalpha.com\/news\/3935572-nasdaq-sp500-dow-jones-stock-market<\/a><\/a><\/p>\n

1. <\/span>“EURUSD runs up to the 200 hour MA ahead of the CPI. The key technicals ahead of CPI data.” ForexLive, 14 Feb. 2023, https:\/\/www.forexlive.com\/technical-analysis\/eurusd-runs-up-to-the-200-hour-ma-ahead-of-the-cpi-the-key-technicals-ahead-of-cpi-data-20230214\/<\/a><\/a><\/p>\n

2. <\/span>“Markets Brief: January CPI Report Forecasts Show a Bump in the Road to Lower Inflation” Morningstar, 10 Feb. 2023, https:\/\/www.morningstar.com\/articles\/1136947\/markets-brief-january-cpi-report-forecasts-show-a-bump-in-the-road-to-lower-inflation<\/a><\/a><\/p>\n

3. <\/span>“Consumer prices rose 6.4% in January” Fox Business, 14 Feb. 2023, https:\/\/www.foxbusiness.com\/economy\/will-cpi-reinforce-powells-disinflation-view<\/a><\/a><\/p>\n

4. <\/span>“US inflation eases again for seventh consecutive month” The Guardian, 14 Feb. 2023, https:\/\/www.theguardian.com\/business\/2023\/feb\/14\/us-inflation-eases-seventh-consecutive-month<\/a><\/a><\/p>\n

5. <\/span>“CPI expected to jump M\/M in January but cool Y\/Y; don’t expect a Fed pivot” Seeking Alpha, 13 Feb. 2023, https:\/\/seekingalpha.com\/news\/3935369-cpi-expected-to-jump-in-january<\/a><\/a><\/p>\n

6. <\/span>“Inflation report due Tuesday has the potential to deliver some bad news” CNBC, 13 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/13\/inflation-report-due-tuesday-has-the-potential-to-deliver-some-bad-news.html<\/a><\/a><\/p>\n

7. <\/span>“What consumers expect on inflation” Axios, 14 Feb. 2023, https:\/\/www.axios.com\/2023\/02\/13\/consumer-inflation-expectations-fed<\/a><\/a><\/p>\n

8. <\/span>“Inflation continued to cool in January” ABC News, 14 Feb. 2023, https:\/\/abcnews.go.com\/Business\/inflation-data-show-prices-eased-amid-hot-jobs\/story?id=97079985<\/a><\/a><\/p>\n

9. <\/span>“CPI: Prices rise 6.4 percent in January, seventh month of easing inflation” The Washington Post, 14 Feb. 2023, https:\/\/www.washingtonpost.com\/business\/2023\/02\/14\/inflation-easing-cpi-january\/<\/a><\/a><\/p>\n

10. <\/span>“Dow Jones Surges 376 Points Into Key CPI Inflation Report; What To Do Now” Investor’s Business Daily, 14 Feb. 2023, https:\/\/www.investors.com\/market-trend\/stock-market-today\/dow-jones-rallies-376-points-into-key-cpi-inflation-report\/<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Economists are expecting that the Consumer Price Index (CPI) will show a 0.5% increase in January, translating into 6.2% annual growth, according to a survey conducted by Dow Jones.[0]<\/a><\/sup> Excluding food and energy, so-called core CPI is projected to rise 0.4% and 5.5%, respectively.[1]<\/a><\/sup> This would be the biggest monthly increase since October.[2]<\/a><\/sup> Federal Reserve Chair Jerome H. Powell has acknowledged the presence of “disinflation” in the US economy.[3]<\/a><\/sup> However, the strength of the jobs market has worried some Fed officials, who are concerned that the tight labor market will lead to wage rises and will feed inflationary pressures.[4]<\/a><\/sup><\/p>\n

The January CPI report will be closely watched, as it will provide market participants with another reading into how the Federal Reserve is faring in its battle against inflation.[5]<\/a><\/sup> According to the Cleveland Federal Reserve’s “Nowcast” tracker, the Consumer Price Index (CPI) is projected to rise by 0.65% on a monthly basis and 6.5% year-over-year.[2]<\/a><\/sup> The forecast for the core is 0.46% and 5.6%.[6]<\/a><\/sup> A New York Federal Reserve consumer survey showed that expectations for inflation in 2023 were unchanged from 5% in December.[7]<\/a><\/sup> The New York Fed reported that the anticipated rate of inflation three years in the future was 2.7%, while inflation was forecast to be 2.5% five years from now.[8]<\/a><\/sup><\/p>\n

The Federal Reserve has increased rates for eight consecutive times in a period of less than twelve months, increasing by a quarter of a percentage point most recently; this is a slower pace than in nearly all of 2022.[9]<\/a><\/sup> It is predicted that the Federal Reserve will up their benchmark interest rate two times from the current 4.5%-4.75% target range.[6]<\/a><\/sup> This would equate to a further 0.5%, or 50 basis points.[6]<\/a><\/sup> Market analysis suggests that the Federal Reserve will ultimately settle at a rate of 5.18%.[6]<\/a><\/sup><\/p>\n

On Monday, the yield on the 10-year U.S. Treasury dropped to 3.71%. Monday saw a less than 1% drop in oil prices, temporarily halting the significant recovery which had taken place the week prior.[10]<\/a><\/sup> Futures of West Texas Intermediate were trading at slightly more than $79 per barrel.[10]<\/a><\/sup> On Tuesday, yields from the U.S. Treasury decreased as people in the investing world awaited the most recent consumer price index report and assessed the economic outlook. The 10-year Treasury yield was down 2 basis points 3.69%. The 2-year yield dipped 3 basis points to 4.51%.[0]<\/a><\/sup><\/p>\n

0. <\/span>“Nasdaq, S&P futures point up as traders bet on on Valentine’s CPI treat” Seeking Alpha, 14 Feb. 2023, https:\/\/seekingalpha.com\/news\/3935572-nasdaq-sp500-dow-jones-stock-market<\/a><\/a><\/p>\n

1. <\/span>“EURUSD runs up to the 200 hour MA ahead of the CPI. The key technicals ahead of CPI data.” ForexLive, 14 Feb. 2023, https:\/\/www.forexlive.com\/technical-analysis\/eurusd-runs-up-to-the-200-hour-ma-ahead-of-the-cpi-the-key-technicals-ahead-of-cpi-data-20230214\/<\/a><\/a><\/p>\n

2. <\/span>“Markets Brief: January CPI Report Forecasts Show a Bump in the Road to Lower Inflation” Morningstar, 10 Feb. 2023, https:\/\/www.morningstar.com\/articles\/1136947\/markets-brief-january-cpi-report-forecasts-show-a-bump-in-the-road-to-lower-inflation<\/a><\/a><\/p>\n

3. <\/span>“Consumer prices rose 6.4% in January” Fox Business, 14 Feb. 2023, https:\/\/www.foxbusiness.com\/economy\/will-cpi-reinforce-powells-disinflation-view<\/a><\/a><\/p>\n

4. <\/span>“US inflation eases again for seventh consecutive month” The Guardian, 14 Feb. 2023, https:\/\/www.theguardian.com\/business\/2023\/feb\/14\/us-inflation-eases-seventh-consecutive-month<\/a><\/a><\/p>\n

5. <\/span>“CPI expected to jump M\/M in January but cool Y\/Y; don’t expect a Fed pivot” Seeking Alpha, 13 Feb. 2023, https:\/\/seekingalpha.com\/news\/3935369-cpi-expected-to-jump-in-january<\/a><\/a><\/p>\n

6. <\/span>“Inflation report due Tuesday has the potential to deliver some bad news” CNBC, 13 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/13\/inflation-report-due-tuesday-has-the-potential-to-deliver-some-bad-news.html<\/a><\/a><\/p>\n

7. <\/span>“What consumers expect on inflation” Axios, 14 Feb. 2023, https:\/\/www.axios.com\/2023\/02\/13\/consumer-inflation-expectations-fed<\/a><\/a><\/p>\n

8. <\/span>“Inflation continued to cool in January” ABC News, 14 Feb. 2023, https:\/\/abcnews.go.com\/Business\/inflation-data-show-prices-eased-amid-hot-jobs\/story?id=97079985<\/a><\/a><\/p>\n

9. <\/span>“CPI: Prices rise 6.4 percent in January, seventh month of easing inflation” The Washington Post, 14 Feb. 2023, https:\/\/www.washingtonpost.com\/business\/2023\/02\/14\/inflation-easing-cpi-january\/<\/a><\/a><\/p>\n

10. <\/span>“Dow Jones Surges 376 Points Into Key CPI Inflation Report; What To Do Now” Investor’s Business Daily, 14 Feb. 2023, https:\/\/www.investors.com\/market-trend\/stock-market-today\/dow-jones-rallies-376-points-into-key-cpi-inflation-report\/<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":748,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/749"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=749"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/749\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/748"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}