CPI Inflation for January Increases 7.5% on Yearly Basis

Consumer prices increased more than anticipated over the last 12 months, highlighting hot inflation and the increasing possibility of more interest rate increases this year.

The Labor Department reported Yesterday that the consumer price index (CPI) for January increased 7.5% in comparison to a year ago.

Dow Jones predicted a 7.2% increase on an annual basis. It is the highest reading of inflation since February 1982 for a particular month.

Stock market futures showed a decline following the inflation report.

Government bond yields increased sharply, with the standard 10-year Treasury note reaching 2%, its peak since August 2019.

Barry Gilbert, Asset Allocation Strategist at LPL Financial said, “With another surprise jump in inflation in January, markets continue to be concerned about an aggressive Fed. While things may start getting better from here, market anxiety about potential Fed overtightening won’t go away until there are clear signs inflation is coming under control.”