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2023-03-14

Today's Inflation Report Could Be Another Headache for the Fed

The next inflation reading, due on Tuesday, is the last significant report on U.S. consumer prices b

Today's Inflation Report Could Be Another Headache for the Fed

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Chaos in the banking sector following two bank failures has reoriented the market’s focus in recent days, but that doesn’t change the importance of the data.</p><p>The U.S. consumer price index (CPI) for February, a key indicator of goods and services inflation, is likely to show that price growth continued to moderate last month, albeit just slightly from January’s level. That suggests the Fed’s effort to tame inflation with higher rates is working, but slowly.</p><p>Economists surveyed by FactSet expect that CPI rose 6% year-over-year in February, a decline from 6.4% in January, with price growth falling to 0.4% month-over-month from 0.5% in January.</p><p>“With the year-over-year change in oil prices falling deeper into the negative territory, a notable slide in the headline CPI rate seems more than normal,” said Charalampos Pissouros, an analyst at broker XM.</p><p>Core CPI, which excludes volatile food and energy costs, likely fell to an annual rate of 5.5% last month from 5.6% in January.</p><p>“Should the core rate slip by more than anticipated, market participants may feel more confident [of] the latest adjustment in their Fed bets,” said Pissouros.</p><p>Those bets refer to investors’ expectations for the U.S. central bank’s next move in rates. The Fed raised rates by 25 basis points in February, compared with a 50-basis-point increase in December and several 75-basis-point increases last year. [A basis point is one hundredth of a percentage point.]</p><p>The rise in interest rates over the past 12 months helped spur a steep stock-market selloff, which resumed in February after stocks rallied in January.</p><p>Prior to last Friday’s failure of Silicon Valley Bank, and regulatory decisions to backstop depositors and open a new lending facility for banks, traders were split in their outlook for the next rate decision. Some expected the Fed to lift the federal funds rate by 25 basis points, and others, by 50 basis points.</p><p>Now, says Quincy Krosby, chief global strategist at LPL Financial, there is “a question as to whether the Fed will lift rates at all,” or announce a pause in the bank’s monthly quantitative tightening program. The Fed might do both, she suggested.</p><p>Monday, the futures market was pricing in a 35% chance that the Fed won’t change interest rates next week, and a 65% chance that it will hike by 25 basis points, according to the CME FedWatch Tool. A half-point rate hike is considered off the table.</p><p>The sharp rise in interest rates over the past year left Silicon Valley Bank sitting with huge unrealized losses on its bond portfolio, including mortgage-backed securities. When the bank was forced to sell some of its holdings, incurring an actual loss of $1.8 billion, depositors fled.</p><p>“A fascinating set up ahead of CPI tomorrow,” Jim Reid, a strategist at Deutsche Bank, said Monday.</p><p>That’s putting it mildly.</p></body></html>","source":"mwatch_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Today's Inflation Report Could Be Another Headache for the Fed</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nToday's Inflation Report Could Be Another Headache for the Fed\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-14 13:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/articles/february-cpi-inflation-data-report-today-ea428646?mod=newsviewer_click><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The next inflation reading, due on Tuesday, is the last significant report on U.S. consumer prices before the Federal Reserve meets on March 21-22 to make its next interest-rate decision. Chaos in the...</p>\n\n<a href=\"https://www.marketwatch.com/articles/february-cpi-inflation-data-report-today-ea428646?mod=newsviewer_click\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index",".DJI":"道琼斯"},"source_url":"https://www.marketwatch.com/articles/february-cpi-inflation-data-report-today-ea428646?mod=newsviewer_click","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2319025769","content_text":"The next inflation reading, due on Tuesday, is the last significant report on U.S. consumer prices before the Federal Reserve meets on March 21-22 to make its next interest-rate decision. Chaos in the banking sector following two bank failures has reoriented the market’s focus in recent days, but that doesn’t change the importance of the data.The U.S. consumer price index (CPI) for February, a key indicator of goods and services inflation, is likely to show that price growth continued to moderate last month, albeit just slightly from January’s level. That suggests the Fed’s effort to tame inflation with higher rates is working, but slowly.Economists surveyed by FactSet expect that CPI rose 6% year-over-year in February, a decline from 6.4% in January, with price growth falling to 0.4% month-over-month from 0.5% in January.“With the year-over-year change in oil prices falling deeper into the negative territory, a notable slide in the headline CPI rate seems more than normal,” said Charalampos Pissouros, an analyst at broker XM.Core CPI, which excludes volatile food and energy costs, likely fell to an annual rate of 5.5% last month from 5.6% in January.“Should the core rate slip by more than anticipated, market participants may feel more confident [of] the latest adjustment in their Fed bets,” said Pissouros.Those bets refer to investors’ expectations for the U.S. central bank’s next move in rates. The Fed raised rates by 25 basis points in February, compared with a 50-basis-point increase in December and several 75-basis-point increases last year. [A basis point is one hundredth of a percentage point.]The rise in interest rates over the past 12 months helped spur a steep stock-market selloff, which resumed in February after stocks rallied in January.Prior to last Friday’s failure of Silicon Valley Bank, and regulatory decisions to backstop depositors and open a new lending facility for banks, traders were split in their outlook for the next rate decision. Some expected the Fed to lift the federal funds rate by 25 basis points, and others, by 50 basis points.Now, says Quincy Krosby, chief global strategist at LPL Financial, there is “a question as to whether the Fed will lift rates at all,” or announce a pause in the bank’s monthly quantitative tightening program. The Fed might do both, she suggested.Monday, the futures market was pricing in a 35% chance that the Fed won’t change interest rates next week, and a 65% chance that it will hike by 25 basis points, according to the CME FedWatch Tool. A half-point rate hike is considered off the table.The sharp rise in interest rates over the past year left Silicon Valley Bank sitting with huge unrealized losses on its bond portfolio, including mortgage-backed securities. When the bank was forced to sell some of its holdings, incurring an actual loss of $1.8 billion, depositors fled.“A fascinating set up ahead of CPI tomorrow,” Jim Reid, a strategist at Deutsche Bank, said Monday.That’s putting it mildly.","news_type":1},"isVote":1,"tweetType":1,"viewCount":475,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":4,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}