The inflation rate in the US fell slightly in January, from 6.5% to 6.4%. However, inflation remains higher than expected, raising concerns among investors that the US central bank will continue to raise the benchmark federal funds rate.
Inflation in the US remains high, which creates uncertainty in the markets
Inflation in the United States exceeded expectations among analysts and economists for January 2023. The US Department of Labor released the Consumer Price Index (CPI) on February 14, which measures the value of goods and services across the country. From December 2022 to January 2023, the rate dropped from 6.5% to 6.4%. Over the 12-month period, however, prices rose by 0.5%.
Furthermore, the core CPI rose 0.4% during the month and 5.6% from the previous year. According to the U.S. Department of Labor, “The shelter index was the largest contributor to the monthly increase in all goods, accounting for nearly half of the increase, with food, gasoline, and natural gas indexes also contributing.” The latest inflation report has raised concerns among investors that US Federal Reserve Chairman Jerome Powell will continue to raise interest rates.
At the last meeting of the Federal Open Market Committee (FOMC), the Fed appeared dovish and only raised the federal funds rate by 0.25%. Powell stated that the central bank has been monitoring the “disinflation process”, but stressed that it is still early. “There has been an expectation that it will go away quickly and painlessly — and I don’t think that’s guaranteed at all,” Jerome Powell, the Fed chairman, said at an event last week.
After the Labor Ministry’s CPI report, shares, precious metals and cryptocurrencies fell somewhat, but have since recovered. As of 9:30 AM ET on Tuesday, all four US benchmarks (DJIA, SPX, COMP, RUT) are in positive territory.
Similarly, the crypto economy is recovering after experiencing some volatility immediately after the CPI was published, and is up 0.7% today. While silver is down 1.23% at the time of writing, the price of gold per ounce is up 0.18% according to the New York Spot Price on Tuesday.
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Biden inflation, central bank, consumer price index, consumption, CPI, CPI report, CPI report January, Cryptocurrencies, disinflation process, Economy, Federal Funds Rate, Federal Open Market Committee, Federal Reserve, Financial Markets, FOMC, Food, Global Economy , gold , inflation , inflation rates , interest rates , investors , jerome powell , joe biden , markets , monetary policy , natural gas , precious metals , price increase , shelter , silver , stocks , trade , US Labor Department , US Dollar , Wall Street
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Jamie Redman
Jamie Redman is the news editor at Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
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