US Consumer Price Index rose 0.1% in Feb, as expected

French inflation slowed in February, statistics agency Insee said Wednesday, confirming a preliminary reading at the end of last month.

The annual rate of inflation, based on monthly WPI, stood at 6.55% (provisional) for the month of February, 2017 (over February, 2016) as compared to 5.25% (provisional) for the previous month and -0.85% during the corresponding month of the previous year.

On a month-on-month basis, the headline index rose by 1.49 per cent in February 2017, representing a 0.48 per cent points higher from the 1.01 per cent recorded in January.

Upasna Bhardwaj, Senior Economist, Kotak Mahindra Bank said, ” Higher than expected CPI inflation has primarily been led by waning dis-inflationary food price pressures. In February, the CPI index was set at 243.603, an increase of 0.31% over the January number.

According to the RBZ study, 58 percent of factors that drove Zimbabwe’s headline inflation into negative territory came from outside. As the Fed prepares to deliver its updated economic outlook at today’s FOMC meeting, there is a good chance the committee may lift its 2017 inflation calls, now at 1.9 percent on the headline PCE deflator and 1.8 percent on the core PCE deflator.

Core inflation drops to 16.0% year on year in February 2017 from 17.9% in January 2017 and by 0.68% month on month in February 2017 from 0.62% in January.

Asia’s third largest economy grew 7 percent in the October-December quarter and is expected to grow at 7.1 percent in the current fiscal year ending March.

Consumers who heaved a sigh of relief as retail inflation fell during the last six months, from 6.1% in July 2016 to 3.2% in January 2017, have now reasons for concern. Inflation in fruits was higher at 8.33 per cent, fuel and light at 3.9 per cent in February.

For instance, the bureau stated that while housing, electricity, gas and other fuels, education and alcoholic beverages, clothing and transportation services recorded accelerated price increases, soft drinks, coffee and cocoa moderated during the period.

“Should inflation continue to firm and consumer spending remain solid, we expect the Fed will hike again in June, and at least three times this year”, said Michael Hanson, chief economist at TD Securities in NY.