US Consumer Prices Rise 0.2% In February

Gold prices rise the following inflation data and is near 1326.00 U.S Dollars per ounce. Markets now agree with Fed projections for three hikes, though a more aggressive inflation move could trigger additional increases.

Terming it as a “challenging period” for the central rate setting panel, Japanese brokerage Nomura said the rising MSPs are a risk and once inflation starts rising from the second quarter, the apex bank would turn more hawkish.

Bloomberg Economics estimates the consumer price index rose 4.54% year on year, down from a 5.07% rise in January.

Following the softening of consumer price index (CPI) inflation and a 7.5 percent hike in the Index of Industrial Production (IIP) numbers, the State Bank of India opined that the latter may touch double-digit figures in February this year. For core CPI, we expect some reversal of the strength in January and forecast an increase of 0.1% m/m and 1.7% y/y. The five-year note, was down 1 basis point to 2.625 percent. The highlighted 2 percent level is the Federal Reserve’s Core inflation target for the CPI’s cousin index, the BEA’s Personal Consumption Expenditures (PCE) price index. The chart is based on autoregressive analysis of monthly Consumer Price Index data, which was obtained from the National Bureau of Statistics (NBS). However, the U.S Dollar and major currencies could resume their known trading realms which have been quite the past couple of sessions.

Investors also kept a close eye on the replacement of the country’s secretary of state.

Falling stock prices pressured oil futures, which fell as much as 1.8 percent before regaining some ground.

In January, manufacturing grew by a robust 8.7 per cent, followed by 7.6 per cent increase in electricity generation.

Next week, the Fed is widely expected to raise short-term interest rates for the sixth time since late 2015, when it started lifting rates from almost zero. However, markets are anxious to see how aggressive the bank will be on further rate hikes through the year.

Economists said that the seasonal trend of rising food prices may curtail the slide in food inflation going ahead that is likely to result in status quo by the RBI in its next policy meeting. Policymakers consider the labor market to be near or a little beyond full employment. Apparel prices rose 1.5% on the month and transportation services increased 1%.

As per use-based classification, the growth rates in January 2018 over January 2017 are 5.8 per cent in primary goods, 4.9 per cent in intermediate goods and 6.8 per cent in infrastructure/ construction goods.

US consumer prices increased at a modest pace in February, underscoring that inflation pressures appear to be muted for now.

Retail inflation fell to a 4-month low of 4.44 per cent in February on cheaper food articles and lower cost for fuel.

The core CPI was restrained by a moderation in rents.

In the year to February, overall prices rose 2.2%, the largest annual increase since November.

Households also paid less for healthcare. The cost for medical care was also down one-tenth of a percent and recreational costs were flat. The decline comes after prices for new and used cars jumped last fall as residents of Texas and Florida replaced cars destroyed by hurricanes.

Year-over-year, the index posted a 2.2 per cent gain, above the 2.1 per cent recorded in January.