Inflation rose more than expected in January, still hanging over 3%
- MoM January Consumer Price Index: +0.3% vs. +0.2% expected and +0.2% in December (revised from +0.3%).
- YoY +3.1% Y/Y vs. +3.0% expected and +3.4% prior.
- Core CPI, which excludes food and energy:
- MoM+0.4% vs. +0.3% expected and +0.3% prior.
- YoY +3.9% Y/Y vs. +3.7% expected and +3.9% prior.
The biggest factors:
The shelter index increased 0.6% in Jan. after rising 0.4% in Dec.
Health insurance climbed 1.4% on the month, the most since September 2022. Vehicle insurance rose the same amount, and that’s on top of a long string of outsize gains. The year-on-year increase in car insurance continues to be the biggest since 1976.
Treasury yields soared across the curve. Both two-year and 10-year yields jumped about 15 bps.
The market sees no chance for a rate hike in March. The odds for an increase in May are about 1/3. A hike in June is fully priced in, though.