US inflation as expected

David Morrison Trade Nation

Headline and Core CPI both rose 0.2% in February as expected.

This should help to calm nerves following an unexpected jump in consumer prices in January

At the beginning of February US stock indices experienced their largest and most protracted sell-off since early 2016 after a jump in Average Hourly Earnings triggered inflationary fears which led to a spike in bond yields and volatility. This was compounded a fortnight later by an unexpected surge in CPI when the headline number rose 0.5% in January – well above the +0.1% rise from the previous month.

Today’s data should help to take the pressure off equities and bonds – for the time being at least. Consequently, we shouldn’t be surprised to see US Treasury yields pull back and the major US stock indices continue their ascent, at least until we hear what the Fed’s FOMC has to say at next week’s meeting.

Author

David Morrison

Trade Nation

Senior Market Analyst at Trade Nation since August 2019. David's role is to build value and growth through customer acquisition and retention via market commentaries, blogs and vlogs.

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