January 2023 consumer price index (CPI) report showed that inflation grew at a 6.4% annual rate, slightly higher than expected, reports CNBC.
CPI came in at 6.4% y/y above expectations of 6.2%, and Shelter remained persistent due to the long lags before home & rental price declines feed through–Shelter is adding 3% to the y/y rate.
This print was sticky. pic.twitter.com/23X1OUun3y
— Liz Young (@LizYoungStrat) February 14, 2023
Stubbornly high January inflation reading and the December CPI report was revised to show a slight gain instead of a decline was largely better than feared, but at the same time unlikely to cause the Fed to back off from its tightening campaign.
“While there were no major surprises in today’s CPI reading, it is a reminder that while inflation has peaked it could be a while before we see it moderate to normal levels,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment office.
“The question remains if inflation will be able to fall to the Fed’s target levels with the labor market as tight as it currently is,” he added. “That could be the recipe for a soft landing, but it remains to be seen when the Fed will shift away from rate hikes and if the labor market will lose its resiliency.”
The US printed 40% new M2 in 2 years. The US$ has not, yet, experienced a 40% decline in its purchasing power.
Friedman said this inflation would last 18-24 months.
So, the US CPI, up 6.4% in the past year, will continue to run hotter than people think— Brian Wesbury (@wesbury) February 14, 2023
References:
Invest with a purpose and a strategy. Pay yourself first.
Today’s core CPI was as expected, but a lot of the numbers deeper in the report showed inflation stubbornly hanging on, especially in so-called “sticky” areas like furniture and recreation.
It’s going to take time to digest this report, because numbers are all over the place.
— Schwab Trading (@SchwabTrading) February 14, 2023
The purpose of a system is to continue to play the game.