The energy index rose 1.1% in January, driven by a 1.8% jump in gasoline prices. Food prices also climbed 0.4%, with groceries up 0.5% and restaurant meals increasing 0.2%. These persistent price pressures signal that inflation may not cool as quickly as previously expected.
Markets React Sharply to Hot Inflation Print
Stock futures plunged following the CPI release, as traders reassessed the likelihood of near-term rate cuts. Dow Jones Industrial Average futures dropped nearly 400 points, or 0.9%, while Nasdaq 100 futures slid 0.9%. The S&P 500 showed relative resilience, hovering near the flatline, but overall market sentiment turned cautious.
Treasury yields spiked as investors priced in the possibility of the Fed keeping rates higher for longer. The stronger-than-expected inflation print complicates the outlook for monetary policy, with markets now questioning whether policymakers will delay rate cuts…
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