Inflation Increases In January More Than Expected; Dollar and Yield On 10 Yr. Treasury Jump


Inflation rose in January with the Consumer Price Index (CPI) moving up 0.5 percent in January and raising expectations that the Federal Reserve will take a hawkish approach towards interest rate hikes in 2018 as inflation is moving closer to their 2 percent inflation target.

During the past year, the all items index rose 2.1 percent for the 12 months ending January, according to latest inflation data today from the Bureau of Labor Statistics.

The index for all items, minus food and energy, increased 0.3 percent in January.

The index for all items, minus food and energy, rose 1.8 percent over the past year.

The energy index rose 3.0 percent in January with the increase in the gas index offsetting declines in other energy component indexes. The food index rose 0.2 percent.

The U.S. dollar is rallying today and the yield on the 10 year Treasury is spiking higher 4 basis points to 2.87 percent after the better than expected CPI inflation data increases the chances of an upcoming rate hike during the Fed’s March policy meeting and makes it possible for a 4th interest rate hike in 2018.

U.S. stock futures are plunging on the latest CPI inflation reading with the Dow down -256 points (-1.04 percent).

Tomorrow another inflation, PPI, is reported for January.

January U.S. Retail Sales

U.S. retail sales and food services in January decreased 0.3 percent from the previous month but 3.6 percent above January 2017, according to latest data from the U.S. Census Bureau.

Retail trade sales were lower 0.3 percent from December 2017, but 3.9 percent above last year.

Written and Edited By:

Johnathan Schweitzer



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