March 1, 2024 (NO COMMENTS)

Investors buying into the narrative that central bankers have decisively tamed inflation had their faith shaken last month, when the January US Consumer Price Index came in hot on February 13, sending stock prices tumbling.

The latest report revealed that the core CPI experienced a year-over-year increase of 3.9%, 0.2% more than expected. The news led to a spike in yields on 10-year Treasury bonds, as investors reassessed the potential for higher rates for longer. The likelihood of a rate cut in March sits at just 6%, with the market now anticipating a cut in June, according to a JP Morgan report issued on February 14.

Meanwhile, the latest consumer expenses figure – the Fed’s preferred inflation metric – was 0.43% higher in January. While broadly in line with analyst forecasts, the jump was nevertheless the highest single-month rise in a year.