Economists expect the overall consumer price index (CPI) to rise by 0.5% in January, following an upwardly revised 0.1% increase in December. For the year, the CPI rate is anticipated to slip to 6.2% from 6.5% in December. Excluding volatile food and energy costs, the core CPI is forecast to rise 0.3% and 5.5%, respectively.
The data released on Wednesday showed that CPI rose 0.5% in January and was up 6.4% from a year earlier. The Core Consumer Price Index, not including food and energy, rose 0.4% in the past month and experienced an increase of 5.6% compared to a year ago.
The 10-year Treasury yield rose 5 basis points to 3.81%, a 2023 high, while the five-year note’s yield rose as much as 12 basis points to 4.03%. Since the beginning of February, Treasury yields have increased significantly, which has created a small obstacle to the stock market's success but not as powerful as it was in the past.
The Federal Reserve has raised its policy rate eight times since March 2022, most recently to a range of 4.5%-4.75% on Feb. 1, after dropping the lower bound to 0% at the onset of the pandemic. The median forecast by Fed officials is for the policy rate to end the year at about 5.1%.
On Tuesday, Thomas Barkin, President of the Richmond Federal Reserve, and Lorie Logan, President of the Dallas Federal Reserve, both emphasized the importance of raising rates for longer than anticipated in order to sustain the easing of inflation. Patrick Harker, President of the Philadelphia Federal Reserve, stated that policymakers were nearing the point at which interest rates were sufficiently restrictive.
Crude oil prices in the United States decreased by 1.4%, settling at $79 In commodities markets, oil continued to barrel lower as the dollar rose and U.S. stockpiles were estimated to have grown.
Credo Technology Group Holding Ltd (CRDO) plummeted about -42% in pre-market trading after the company announced it expects Q4 revenue to be at $30M-$32M compared to the consensus of $55.1M.
On Tuesday, the stock market saw a 0.5% decline in the Dow Jones Industrial Average. Despite heavy gains from Tesla, Aptiv and CDNS stock, the S&P 500 index still experienced a slight decrease.
0. “Consumer prices rose 6.4% in January” Fox Business, 14 Feb. 2023, https://www.foxbusiness.com/economy/will-cpi-reinforce-powells-disinflation-view
1. “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
2. “U.S. inflation is likely ‘far stickier' and could last a decade, Bill Smead says” CNBC, 14 Feb. 2023, https://www.cnbc.com/2023/02/14/bill-smead-us-inflation-is-far-stickier-and-could-last-a-decade.html
3. “Traders Capitulate, Abandoning Fed Rate Cut Bets After CPI Spike” Yahoo News, 14 Feb. 2023, https://news.yahoo.com/traders-capitulate-abandoning-fed-rate-213611625.html
4. “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/
5. “Stocks Plunge Before The Open As Sticky U.S. Inflation Sparks Rate Worries, U.S. Retail Sales Data In Focus” Barchart, 15 Feb. 2023, https://www.barchart.com/story/news/14218794/stocks-plunge-before-the-open-as-sticky-u-s-inflation-sparks-rate-worries-u-s-retail-sales-data-in-focus
6. “Dow Jones Futures: Market Rally Keeps Rising” Investor's Business Daily, 16 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-market-rally-keeps-climbing-shopify-roku-cisco-are-key-earnings-movers
7. “Stock market news today: Stocks rise after strong retail sales data” Yahoo News, 15 Feb. 2023, https://news.yahoo.com/stock-market-news-today-february-15-2023-130622082.html
8. “Markets Today: Stocks Fall as Strong U.S. Economic Reports Keep the Fed Hawkish” Barchart, 15 Feb. 2023, https://www.barchart.com/story/news/14226554/markets-today-stocks-fall-as-strong-u-s-economic-reports-keep-the-fed-hawkish
9. “U.S. stocks are falling after retail sales fuel rate fears By Investing.com” Investing.com, 15 Feb. 2023, https://www.investing.com/news/stock-market-news/us-stocks-are-falling-after-retail-sales-fuel-rate-fears-3004284
10. “Futures Fall After Market Shrugs Off Inflation; Hot Stock Crashes” Investor's Business Daily, 15 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