Mark Smith, SVP of Wells Fargo Advisors, and Phil Brancato, chief market strategist at Ozaik, analyze December's inflation data and discuss how investors should act in the bond market when it comes to “making money.” Discuss Kika.
Wholesale-level inflation slowed more than expected in December, providing evidence that price pressures within the U.S. economy continue to gradually ease.
The Labor Department announced Friday that it will measure the producer price index. Inflation at the wholesale level In December, prices fell 0.1% month-on-month before reaching consumers. On an annual basis, prices continue to rise by 1%, up slightly from the 0.8% recorded in November.
Both of these figures were below the 0.1% monthly increase and 1.3% annualized increase that Refinitiv economists had expected.
Rising childcare fees are starting to take a toll on our family.
In another sign that high inflation is easing, core prices, which exclude more volatile measures of food and energy, were also unchanged for the month, falling below expectations by 0.2%. On a 12-month basis, it rose 1.8%, down from 2.2% last month.
December inflation breakdown: Where are prices rising fastest?
The data was released a day after the Department of Labor reported: consumer price indexThe index, which measures prices paid directly by consumers, rose 0.3% in December, stronger than expected.
Customers visit a supermarket in San Mateo, California, USA on December 12, 2023. (Photo credit: Li Jianguo/Xinhua News Agency via Getty Images/Getty Images)
The flurry of inflation reports will have a big impact on the Federal Reserve. The Federal Reserve has been raising interest rates at the fastest pace in decades to meet its goal. cool the economy. The central bank has approved 11 rate hikes in just 16 months, pushing the federal funds rate to its highest level since 2001.
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Central bank officials have signaled in recent weeks that interest rate hikes are over and that they will soon cut rates. But policymakers have provided little guidance on when to start cutting rates.
Despite the better-than-expected CPI report, most investors are pricing in a quarter-point cut as early as March, according to the FedWatch tool, which tracks CME Group trading.
