US inflation remains higher than expected, worrying investors – Economics
The inflation level in the US eased slightly in January, falling from 6.5% to 6.4%. The inflation remains higher than expected, however, raising concerns among investors that the US Federal Reserve will raise interest rates further.
US inflation remains high causing uncertainty in markets
Inflation in the United States exceeded analyst and economist expectations for January 2023. The US Department of Labor released the Consumer Price Index (CPI) on February 14, which measures the value of goods and services across the country. From December 2022 to January 2023, the rate fell from 6.5% to 6.4%. However, over the 12-month period, prices rose by 0.5%.
Additionally, core CPI rose 0.4% for the month and 5.6% year-on-year. According to the U.S. Department of Labor, “The index for accommodation was the largest contributor to the month-on-month increase of all items and accounted for almost half of the increase, with food, gasoline and natural gas indices also contributing.” The latest inflation report has raised concerns among investors that the Federal Reserve Chairman, Jerome Powell, who will continue to raise interest rates.
At the last meeting of the Federal Open Market Committee (FOMC), the Fed showed dovishness and increased the federal funds rate by just 0.25%. Powell explained that the central bank has been overseeing the “disinflationary process” but stressed it is early days. “It was expected to go away quickly and painlessly — and I don’t think that’s guaranteed at all,” Fed Chair Jerome Powell said at an event last week.
Following the Labor Department’s CPI report, stocks, precious metals and cryptocurrencies receded slightly but have since recovered. As of 9:30 a.m. Eastern Tuesday, all four US benchmark stock indices (DJIA, SPX, COMPRUT) in positive territory.
Similarly, the crypto economy is recovering after experiencing some volatility immediately after the CPI was released, and is up 0.7% today. While silver is down 1.23% as of this writing, gold is up 0.18% per ounce, New York spot prices showed on Tuesday.
What do you think of the latest inflation report in the US? Let us know what you think about this topic in the comment section below.
photo credit: Shutterstock, Pixabay, WikiCommons
(function(d, s, id) {
var js, fjs = d.getElementsByTagName(s)[0];
if (d.getElementById(id)) return;
js = d.createElement(s); js.id = id;
js.src=”
fjs.parentNode.insertBefore(js, fjs);
}(document, ‘script’, ‘facebook-jssdk’));
Source: Crypto News Deutsch
