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Market News
CPI Increased 7%, US Inflation at its Highest Level

CPI Increased 7%, US Inflation at its Highest Level

13-01-2022 09:42

CPI Increased 7% According to the Labor Department

Since last month, the Consumer Price Index rose by 0.5%.

How did CPI is increasing a lot lately?

That pressure was largely expected by many, however, and we can see this reaction in the bond market as longer-term rates fall so far this morning. Excluding food and energy prices, the so-called core CPI rose by 5.5% year-on-year and by 0.6% compared with the previous month.

This contrasts with estimates of 5.4% and 0.5%. For core inflation, it was the largest annual growth since February 1991.

Housing costs, which account for nearly a third of the total, rose by 0.4% for the month and 4.1% for the year. That was the fastest pace since February 2007. Used car prices, which were a major component of rising inflation during the COVID pandemic due to supply chain restrictions that have restricted new vehicle production.

Fed officers are looking at the inflation knowledge closely and are widely expected to lift interest rates this year in a trial combat increasing costs and because the jobs image approaches full employment. Though. the financial organization uses the private consumption expenditures index number as its primary inflation measure, policymakers absorb a good vary of data in creating decisions.

Fastest Increase since June 1982

The annual move was the fastest increase since June 1982 and comes amid a shortage of products and employees and on the heels of new money flowing through the U.S. economy from Congress and also the Federal Reserve.

Despite the robust gain, stocks rose when the news whereas bond yields we tend tore largely negative.

“The monthly CPI report of a 7% increase over the last twelve months is surprising for a few investors as we haven’t seen variety that high” in nearly forty years, said Brian Price, head of investment management at Commonwealth money Network. “However, this print was mostly anticipated by many, and that we will see that reaction within the bond market as longer-term interest rates are declining to this point this morning.”

Excluding food and energy prices, questionable core CPI inflated 5.5% year over year and 0.6% from the previous month. That compared with estimates of 5.4% and 0.5%. For core inflation, it had been the biggest annual growth since February 1991.

Shelter costs, that structure nearly trice of the full rose 0.4% for the month and 4.1% for the year. That was the quickest pace since February 2007.

Used vehicle costs, which are a serious part of the inflation increase throughout the COVID pandemic because of provide chain constraints that have restricted new vehicle production, rose another 3.5% in December, delivery the rise from a year past to 37.3%.

Conversely, energy prices largely declined for the month, falling 0.4% as heating oil was down 2.4% and gas fell 0.5%. Still, the advanced as an entire rose 29.3% within the 12-month period, as well as a gain of 49.6% for gasoline.

DXY – US Index

CPI Increased 7%, US Inflation at its Highest Level
Graph taken from TradingView.

DXY – US Index moves exactly as we predicted the last two days. After CPI data release, DXY drop even more. The next target for DXY is $94.533.

WHAT ZFX THINKS…

DXY – US Index going down means XAUUSD (Gold), GBPUSD, and EURUSD are going up and is on a bullish trend. And this trend looks like going to continue throughout week.

Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.

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