Financial institution of America: Sturdy CPI underscores Fed's warning, price hikes again in dialogue

Financial institution of America analysts say the newest Shopper Worth Index (CPI) report delivered one other upside shock, reinforcing the case for the Federal Reserve to maintain charges on maintain.

The headline CPI rose zero.5% in January (zero.467% unrounded), pushing the annual price to three.zero%, whereas core CPI—which strips out meals and power—elevated zero.four% (zero.446% unrounded), bringing the year-over-year determine to three.three%.

“The underside line is obvious: the Fed has no motive to chop additional,” the analysts wrote, noting that inflation stays caught above the central financial institution’s 2% goal and the unemployment price practically dipped into the three% vary in January.

Whereas they nonetheless see the brink for added price hikes as excessive, Financial institution of America argues that tightening ought to now be again within the dialog following the stronger-than-expected inflation knowledge.

Put the knife down Jay, you will not be needing it the place you’re going ….

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The information may be discovered from right here:

• Ubaidahsan Americas FX information wrap 12 Feb: Increased US CPI pushes yields increased. USD is blended

Earlier responses posted:

• Morgan Stanley hasn’t modified its Federal Reserve forecast regardless of robust US CPI report
• Goldman Sachs revises core PCE inflation forecast increased after CPI report

This text was written by Aaron Cutchburt at www.ubaidahsan.com.



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