U.S. Consumer Price Index to Show 0.4% Increase in January
By The U.S. consumer price index is expected to show a 0.4% increase in January, according to economists polled by The Wall Street Journal.[0] This would translate into 6.2% annual growth, down from 6.5% in December.[1] It is projected that, when food and energy are excluded, core CPI will increase by 0.3% and 5.5%, respectively.[2] The Federal Reserve has raised rates eight straight times in less than a year, and is currently targeting a range of 4.5-4.75%. Markets currently expect the Fed to raise its benchmark interest rate two more times, translating to another half a percentage point, or 50 basis points.
The New York Fed’s January 2023 Survey of Consumer Expectations showed that median inflation expectations for the year ahead held steady at 5%. In three years, Americans anticipate the rate of inflation to be 2.7%, a decrease of 0.3 percentage points from the current rate. In five years, the predicted rate of inflation is 2.5%, an increase of 0.1 percentage points from the current rate.
Tuesday's CPI report is set to be heavily scrutinized, particularly after Federal Reserve Chair Jerome Powell acknowledged the presence of “disinflation” in the U.S. economy.[3] The median consumer anticipates that inflation in the upcoming year will be higher than 5%, the same as the previous month.
Economists surveyed by Dow Jones expect headline inflation to increase 0.4% on a monthly basis, and by 6.2% year-over-year. [4] The forecast for the core is 0.46% and 5.6%.[5]
[8] The Dow Jones Industrial Average futures increased by 27 points, amounting to a 0.08% increase.[9] [6]
0. “CPI Report Today Live: What to Watch on Inflation” The Wall Street Journal, 14 Feb. 2023, https://www.wsj.com/livecoverage/cpi-report-today-january-2023-inflation
1. “Fade The CPI; Here's What Matters To The Fed, S&P 500” Investor's Business Daily, 13 Feb. 2023, https://www.investors.com/news/economy/fade-the-cpi-inflation-report-what-matters-to-the-fed-sp-500
2. “Will CPI reinforce Powell’s disinflation view?” Fox Business, 13 Feb. 2023, https://www.foxbusiness.com/economy/will-cpi-reinforce-powells-disinflation-view
3. “Inflation data will test ‘disinflation' optimism: What to know this week” Yahoo News, 12 Feb. 2023, https://news.yahoo.com/stock-market-week-ahead-consumer-price-index-inflation-retail-sales-172419890.html
4. “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
5. “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
6. “U.S. CPI, BoJ Governor, Palantir, and SPR release – what's moving markets By Investing.com” Investing.com, 14 Feb. 2023, https://www.investing.com/news/economy/us-cpi-boj-governor-palantir-and-spr-release–whats-moving-markets-3002601
7. “Forex Today: Calm before the US CPI storm” FXStreet, 14 Feb. 2023, https://www.fxstreet.com/news/forex-today-calm-before-the-us-cpi-storm-202302140710
8. “Stocks Push Higher On U.S Inflation Optimism” Barchart, 13 Feb. 2023, https://www.barchart.com/story/news/14154436/stocks-push-higher-on-u-s-inflation-optimism
9. “Stock futures inch higher as investors prepare for latest inflation data: Live updates” CNBC, 14 Feb. 2023, https://www.cnbc.com/2023/02/13/stock-market-today-live-updates.html
