U.S. Consumer Price Index Flashing Prolonged Period of High Interest rates, Again

According to the U.S. Labor Department, the Consumer Price Index experienced a larger-than-anticipated increase of 3.1% over the course of 12 months through January, with the monthly gain accelerating.

The significance of this, of course, non-tradable index lies in the fact that although price pressures have eased in general, fully restoring inflation to its normal state may prove to be a more challenging task than initially predicted by economists.

Compared to the 3.4% surge in December, the overall Consumer Price Index (CPI) experienced a 3.1% rise, according to the published upsetting statistics.

In the meantime, the core Consumer Price Index (CPI), which disregards energy and food expenses, experienced a 3.9% surge from January of the previous year, mirroring the same growth observed in December. Experts in economic policy consider this metric to be a more accurate reflection of the fundamental inflationary trends.

In the span of a month, the Consumer Price Index (CPI) experienced an increase of 0.3%, following a previous increase of 0.2% in December. Additionally, the Core CPI saw a rise of 0.4%, surpassing the 0.3% gain observed in the previous month.

Reacting to this ever-important index, global stocks experienced doldrums, while the U.S. bond indices, conversely, rebounded. In order to more accurately assess further directions of markets, investors will need to hear individual assessments of the situation — whether it's transitory or more prolonged — in the future comments of FOMC members.