US Inflation Growth Points Out Faster Pace of Fed’s Rate Hikes This Year
Consumer prices in the US increased more than expected in January, with a measure of underlying inflation posting its biggest gain in a year, strengthening expectations that price pressures will accelerate this year and prompt a faster pace of interest rate increases from the Federal Reserve. The US consumer price index rose by 0.5% month-to-month, beating forecast of a 0.3% increase. CPI rose by 2.1% yoy in January, higher 1.9% growth forecast.
So that, the Fed Chair Jerome Powell may have to tighten his monetary policy more quickly and aggressively than forecasts predicted, after the latest US inflation readings came in above expectations. At least two more rate hikes are now expected this year, with some anticipation of a third hike before the end of 2018.
Separate report showed, that the US retail sales unexpectedly fell in January, recording their biggest drop in nearly a year, as households cut back on purchases of motor vehicles and building materials. Data from the US Commerce Department showed 0.3% fall of retail sales volume in January. Economists had forecast sales to increase by 0.2%.