Financial Associated Press (Shanghai, editor Shi Zhengcheng) news, before thursday local time in the United States, the U.S. Department of Labor Bureau of Labor Statistics released January CPI data, of which the nominal CPI rose 7.5% year-on-year, continuing to hit a new high since February 1982, but also significantly exceeded the market's previous expectations of 7.2-7.3%.
(Source: Bureau of Labor Statistics, Trading)
Affected by this, the US stock market plunged collectively, and the NASDAQ index fell nearly 2% after the opening. The 10-year US Treasury yield, which has attracted much attention, also rose above 2% at one point.
Thursday's data also means that U.S. consumers have endured inflation of more than 5 percent for the eighth consecutive month, reflected in rents, food, energy and electricity and other aspects of life. Even excluding core food and energy CPI, it was also up 6% in January. Nominal and core CPI increased by 0.6% sequentially.
According to the official data sub-item, fuel prices rose by 9.5% month-on-month and a staggering 46.5% year-on-year. Overall energy spending increased by 0.9% month-on-month and 27% in the past 12 months, and food prices also rose 0.9% month-on-month in January. Among the core CPI sub-items, used car prices, which have been driving soaring inflation, also rose 1.5% month-on-month in January, and housing spending, which accounts for a third of the CPI, rose 0.3% month-on-month in January, but this is already the lowest increase since August last year.
(Source: U.S. Department of Labor)
Andrew Hunter, an economist at Capital Economics, said higher food and housing prices, combined with an extremely tight labor market, reflected that inflation was unlikely to subside in the short term.
Inflation has also led the market to set its sights on the Fed. According to the CME "Fed Watch Tool", the expected probability of a 50 basis point rate hike by the Fed FOMC in mid-March has soared to 54% from 24% yesterday after the release of CPI data.
(Source: CME)
James Knightley, chief economist at ING International, said that this is certainly not good news for the Fed, which aims to pull inflation back to its 2% target. Rate hikes by themselves will not solve the strain on the supply chain, but they will remove some of the overheating factors in the economy, making supply and demand turn more balanced, which will also come at the expense of economic growth.