Now it’s official. After 6.8% two months ago, the US consumer price index in December rose 7% year-on-year, to its highest since June 1982. It is the seventh consecutive month that CPI inflation exceeds the threshold of 5% and the third consecutive month that exceeds 6%. However, the high reading was in line with the consensus of economists. In addition, the monthly increase fell from 0.8% in November to 0.5%. It was expected at 0.4%. As for the basic rate, i.e. the rate adjusted for the prices of food and energy goods, it rose slightly more than expected by 0.6% at the economic level and increased by 5.5% year on year, a record since February 1991.
The dynamics of the stars and stripes high cost of living from here on remain shrouded in uncertainty. According to David Kelly, chief global strategist at JP Morgan Asset Management, “the first quarter should see inflation peak, with lower energy prices and a drop in food and auto inflation, allowing for a slower rise in prices for the rest. of the year”. James Knightley, chief international economist of Ing, is also of the same opinion, but he called for caution: “The risks are probably oriented towards a more prolonged rise in inflation, with the Federal Reserve ending up responding more aggressively to keep it under check”. This is because labor costs “are accelerating, companies have pricing power,
Even for Ben Laidler, eToro’s global markets strategist, today’s figure should console the markets as “inflation is uncomfortably high, but probably close to peak levels and destined to gradually decrease as supply chains adjust. and economic growth will slow down “. But what has been referred to as the “Powell Pivot”, reiterated by the Fed chairman himself yesterday at the Senate Banking Committee, is not up for discussion in 2022. Markets now expect the first squeeze on the federal funds rate of 25 basis points in March it occurs with a probability of up to about 79% (Cme FedWatch Tool figure) and “investors have already moved to price almost four interest rate hikes this year”.
Stock indices on Wall Street currently travel just above par. The Dow Jones scores + 0.08%, the S&P 500 + 0.22% and the Nasdaq + 0.23%. US bond purchases with 10-year Treasury yield down 1.72%. The 2-year government bond rate remained stable at 0.9%. The dollar moves back: the US Dollar index travels at 95.07 points (-0.58%) and the euro-greenback exchange rate increases to 1.1438 (+ 0.65%). But the memory of last week’s abrupt reaction, particularly on the Nasdaq, is still alive. “Equity investors will have to prepare for turbulent markets as the Fed arranges to deal with higher inflation than previously anticipated. All this is consistent with our expectations that the first months of the year will be volatile, while the markets They adapt to,
