US CPI YoY for December 2.9% versus 2.9% estimate. MoM 0.4% versus 0.3% estimate
Latest CPI data - from Greg Michalowski / Forexlive
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Prior month 0.3%
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CPI MoM 0.4% versus 0.3% estimate
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CPI YoY 2.9% vs 2.9% estimate
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CPI Core 0.2% vs 0.2% estimate. up 0.225% unrounded.
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CPI Core YoY 3.2% vs 3.3% estimate.
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Real weekly earnings -0.1% versus 0.1% last month (revised from 0.3%)
Summarized from the BLS:
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CPI Increase (Monthly): CPI-U rose 0.4% in December, up from 0.3% in November (seasonally adjusted).
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CPI Increase (Annual): All items index rose 2.9% over the last 12 months (unadjusted).
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Energy Index: Increased 2.6% in December, contributing over 40% of the monthly CPI rise; gasoline rose 4.4%.
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Food Index: Increased 0.3% in December, with food at home and food away from home both rising 0.3%.
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Core CPI (Excluding Food & Energy): Rose 0.2% in December, following four months of 0.3% increases.
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Index Increases (December): Shelter, airline fares, used cars and trucks, new vehicles, motor vehicle insurance, and medical care.
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Index Decreases (December): Personal care, communication, and alcoholic beverages.
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12-Month Trends:Core CPI rose 3.2%.Energy index decreased 0.5%.Food index increased 2.5%.
38 Basis points of cuts are expected by the end of the year up from around 32 basis points ahead of the report.
My thoughts
Inflation has remained stubborn with Core CPI YoY at 2.9% and CPI rising 0.4% between November and December. This is likely to raise concerns with the Federal Reserve. With stubborn inflation, the probability of Fed rate cuts diminishes. Though PCE is the preferred inflation reference for the Fed, this would remain part of their considerations.
If the job market continues to grow, inflation is likely to persist. Some players raised concerns about interest rate hikes. Before the next interest rate decision, the Fed must review key data like GDP and jobs. What should we do?
Let us continue some hedging.
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