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U.S. Inflation Preview: January CPI Data to Test Fed Rate Cut Expectations
The US releases January consumer price inflation (CPI) data on 12 February, with markets watching closely for signs of persistent inflation that could delay Fed rate cuts.
by Chris Beauchamp
IG Bank
What to expect from January’s CPI report
The upcoming US inflation report is expected to show the headline consumer price index (CPI) increasing by 0.3% month-on-month (MoM), slightly down from December’s 0.4% rise. This would keep the year-over-year (YoY) rate steady at around 2.9%.
Core inflation, which excludes volatile food and energy prices, is forecast to rise by 0.3% MoM.
Recent tariff implementations on steel, aluminium, and Chinese goods could contribute to higher input costs, potentially pressuring prices upward through supply chains. The strong January jobs report, showing unemployment at 4% and robust wage growth, suggests inflation might remain sticky, particularly in services.
Fifteen States That Were Hit the Hardest by Skyrocketing Inflation
by T. Woods
NASDAQ
Increased cost of living and inflation have been a significant topic of conversation in the post-COVID-19 America, as prices across the board seem to continually rise. Whether it’s triple-digit grocery receipts or wallet-busting stops at the gas pump, costs continue to grow.
[…] That said, inflation is not a flat rate — it does not rise evenly across America. Indeed, some states have been hit far harder by inflation in the last four years than others.
Curious where your home state falls on the inflation scale? GOBankingRates recently compiled information from the Joint Economic Council’s State Inflation Tracker to discern which states in America have been hit hardest by inflation since 2021.
How Will New Tariffs and Inflation Data Impact Wall Street This Week?
As tariff tensions rise and inflation expectations shift, the Nasdaq holds steady while the S&P 500 diverges, with eyes on Federal Reserve updates.
by Tony Sycamore
IG Bank
Mixed market reactions to tariff news
United States (US) stock markets ended a turbulent week with mixed results. Investors reacted to tariff news at both the start and end of the week, which framed a surge in inflation expectations and a mixed jobs report.
Over the week, the S&P 500 decreased by 0.24%, the Nasdaq 100 inched up by 0.06%, and the Dow Jones fell by 241 points.
Fresh tariff threats from President Trump
This week has started similarly to last week, with fresh tariff headlines indicating that President Trump is set to announce a 25% tariff on steel and aluminium today. Trump is also expected to impose reciprocal tariffs on Tuesday and Wednesday, taking effect almost immediately, which will match the taxes and duties imposed by other countries.
Near-Term Inflation Expectations Surge On Democrat Tariff Fears, Consumer Sentiment Drops
by John Carney
Breitbart.com
The University of Michigan’s gauge of consumer expectations for inflation over the next 12 months surged higher in early February, indicating that American households think inflation will go much higher over the coming year.
Consumers expect prices to rise 4.3 percent, a big increase from 3.3 percent in January. This is the highest expected inflation since November 2023 and only the fifth time in 14 years that the University of Michigan’s survey recorded a gain of one percent or more in a single month.
The gain was driven by increased expectations of rising prices among Democrats. Republican consumers expect zero inflation over the next year, slightly lower than a month ago. Independents expect a 3.7 percent increase, more than they did a month ago and up from around three percent at the end of 2024. Democrats, who expected around 2.5 percent inflation before the November election, now say they expect prices to rise 5.1 percent this year.
Will Tariffs Cause “Inflation?”
by Mike Maharrey
GoldSeek
The Federal Reserve may finally have another scapegoat for the inflation it created – tariffs.
Two Fed officials recently warned about the possible inflationary consequences of President Trump’s aggressive tariff policies.
Of broad-based tariffs, Federal Reserve Bank of Boston President Susan Collins said, “one would expect to have an impact on prices,” and that “you actually would not only see increases in prices of final goods, but also a number of intermediate goods.”
Atlanta Fed President Raphael Bostic sounded a similar warning, saying his business contacts planned to pass tariff costs along to consumers. “The ultimate question about whether that is significantly inflationary depends on exactly how it plays out,” said.
Gold and Silver Technical Analysis Amid Inflation Fears as Fed Signals Rate Cut Delays
Gold (XAU) pulls back from its fresh record high of $2,886.
by Muhammad Umair
FX Empire
Last week’s release of employment data negatively impacted the stock market, while gold (XAU) remained steady above key levels. The data indicates rising inflation expectations, suggesting the Fed will delay rate cuts. Gold’s strength comes from its role as a hedge against inflation, and ongoing uncertainty around interest rates supports its appeal.
[…] The employment data was mixed, with job growth in January at a modest 143K, while the unemployment rate fell to 4.0%, as shown in the chart below.
[…] On the other hand, a drop in average weekly hours to 34.1 signals potential layoffs ahead.
Is U.S. Inflation On the Way Down?
Market Questions is the FT’s guide to the week ahead
by Jennifer Hughes, Valentina Romei, and Mari Novik
FT
January’s consumer price index data is due on Wednesday and is expected to show a slight slowing of the rate of price rises, though that is unlikely to be enough to rush the central bank into another interest rate cut.
The closely watched core inflation measure, which strips out volatile food and energy prices, is expected to come in at 0.3 per cent month on month, for a 3.1 per cent year on year rate, according to economists polled by Reuters, down from 3.2 per cent in December. The headline rate is forecast to remain at 2.9 per cent.
Last month the Fed left rates on hold and signalled it was in no hurry to ease further unless the data supported such a move.
An Inflation Deja Vu?
by Mike Maharrey
GoldSeek
Are we heading for a repeat performance of the resurrection of inflation that we saw in the mid-1970s?
It sure appears to be set up that way.
The Federal Reserve declared victory over price inflation over the summer when it began rolling back its balance sheet reduction. In September, it took another step, initiating a supersized 50 basis point interest rate cut, followed by additional cuts in November and December.
At the time, I said it wasn’t a victory. It was a surrender.
I’ve been arguing for months that the central bank never did enough to slay price inflation. The trajectory of the CPI in recent months seems to bear this out. After dropping as low as 2.4 percent on an annual basis in September, the CPI has crept up for the past three months and stood at 2.9 percent in December. Meanwhile, core CPI has been mired around 3 percent since last summer. It’s clear that inflation isn’t dead.
It’s sticky.
World Inflation at Risk of Rekindling with Trump’s Trade War
by Jana Randow, Katia Dmitrieva and Enda Curran
The Spokesman
The more President Donald Trump threatens tariffs on the U.S.’s trading partners, the more the worry of another inflation wave troubles global economists.
Stubborn consumer-price growth was bothering much of the world even before he entered the White House. With this week’s measures against China offering the first concrete evidence that Trump isn’t just jawboning, prospects for at least some escalation and counter-measures elsewhere are forcing analysts to question how far global disinflation can hold.
“Tariff wars are inflationary, that’s not up for debate,” said Carsten Brzeski, ING’s global head of macro research. “In many places, they add to lingering effects from the past inflation shock, as well as big structural challenges” like aging societies and climate change, he said. “There are currently only very few reasons to expect inflation to remain permanently low.”
While China shows little sign of vulnerability to a price shock for now, the same can’t be said for the rest of the world if some spiral of tariffs unfolds. Multiple economies face latent inflation pressures, either domestic or external.
Daily Voice: Sharp Decline in Food Prices Likely to Bring CPI Inflation Down to Around 4.5% in January, Says This Fund Manager
The budget has the potential to lay a strong foundation for the equity market, said Alok Ranjan of ITI Mutual Fund.
by Sunil Shankar Matkar
Money Control
“The sharp decline in food prices, particularly vegetables, is expected to bring CPI inflation down to around 4.5% in January,” said Alok Ranjan, the Senior Fund Manager at ITI Mutual Fund in an interview to Moneycontrol.
According to him, with inflation showing signs of moderation, a rate cut in February is anticipated for India.
He believes the budget has the potential to lay a strong foundation for the equity market. With more money in the hands of the middle class via tax reliefs, budget could serve as a catalyst for consumption, driving demand across key sectors, Ranjan said.