January CPI (inflation) report hotter than expected.
The January CPI report came out higher than expected which prompted some fears on wall street.
The January CPI report came out today at 8:30 AM and surprised more people than expected. The estimate was that inflation would decline to 6.2%, in reality it came in at 6.5% which is a 0.1% drop from 6.6% in December.
A very bearish indicator, especially since this comes on the heels of the Jobs report in which the US economy added 572,000 jobs in December and the unemployment rate dropped to 3.4% (lowest since 1969). More rate hikes incoming, the Fed target now is above 5% interest rate.
The soft landing narrative went right out the window after this report. What it essentially means is that while inflation is beginning to cool back down, it’s not cooling down at a fast enough rate and may take more time and rate hikes to bring this back to the 2% target of the Fed.
Quite bearish news if you ask me. The stock market was up in the morning but has gone down now with the Dow hitting -0.73%, S&P -0.5% and the Nasdaq with -0.3%. Wall street might have finally realized what this entails. More rate hikes, certainty not a pivot anytime soon by Powell. And probably the most consequenceal of all, the rate hike staying longer than anticipated. Do what you will with this news. Bitcoin is up about 1.3% today.