Categories: Market Overview

US inflation to force the Fed into action

The US inflation report noted higher-than-expected price rises, triggering a boost to the dollar and a pullback in US major index futures.

The price index for January rose 0.6% to an annual rate of 7.5%. The report dashed hopes that the monthly price increase was slowing, as analysts expected a slowdown to 0.4% after December’s 0.5% jump.

The core index added another 0.6% last month, accelerating to 6.0% y/y, the highest level since August 1982.

Thus far, there are few signs of a slowdown in inflation which requires the Fed to take active steps to tighten monetary policy. As might be expected, the stronger-than-expected rise in prices caused a sell-off in US equity futures, with the Nasdaq100 losing 2% and the S&P500 1.3%.

The dollar index immediately gained 0.4%. For the dollar, the current inflation report could be the starting point for a new upward momentum as it virtually unleashes the Fed for a high-profile first move with a key rate hike of 50 points in five weeks.

The FxPro Analyst Team

The FxPro Analyst Team

Our team consists of financial market experts. Our dedicated professionals prepare reviews on the foreign exchange market situation, Crude Oil, Gold and Stock Indices. All the analysts are regularly published in the world leading economic media.

Share
Published by
The FxPro Analyst Team

Recent Posts

GBPUSD Wave Analysis 14 November 2024

- GBPUSD reversed from strong support level 1.2665 - Likely to rise to resistance level…

3 hours ago

USDCAD Wave Analysis 14 November 2024

- USDCAD broke resistance level 1.3950 - Likely to rise to resistance level 1.4050 USDCAD…

3 hours ago

The dollar has reached range limits

The US dollar has strengthened, reaching the upper boundary of its trading range. The British…

6 hours ago

Crypto: Tug-of-war at new altitude

Cryptocurrencies continued to surge, pushing the total cap to $3 trillion. Bitcoin has gained nearly…

6 hours ago

USDJPY Wave Analysis 13 November 2024

- USDJPY broke key resistance level 154.70 - Likely to rise to resistance level 157.20…

1 day ago

USDJPY Wave Analysis 13 November 2024

- USDJPY broke key resistance level 154.70 - Likely to rise to resistance level 157.20…

1 day ago

This website uses cookies