Analysts assess the likelihood of interest rate increases in March, since the CPI is again disappointed

Analysts assess the likelihood of interest rate increases in March, since the CPI is again disappointed

US consumer prices rose again in January and once again showed the largest annual increase in inflation in 40 years. In the 12 months to January, the consumer price index rose by 7.6 %, compared to 7 % in December, which according to the latest index is the greatest increase compared to the previous year since 1982 test report .

Bitcoin and Ether lost 3.6 % or 5.2 % immediately after the report was published before they returned later on Thursday morning. Shares also experienced a slight decline at the opening, but mostly rose later in the trading session.

"US shares made up for most of the inflation-related losses because investors assume that the price pressure could reach its peak shortly before the Federal Reserve's political session in March," said Edward Moya, senior market analyst at Oanda. "Two of the largest inflation presses were the rising prices for accommodations and new vehicles, which both seem to improve in the next quarter."

economists expected an increase of 7.3 %for January. This is the eighth time in the past 10 months that economists have underestimated inflation development.

"[The CPI Reading IS] Definitely higher than the expectations and opens up the possibility of accelerating inflation - which is really bad," said Joseph Wang, a former senior trader in the Open Markets Desk of the Fed.

"Since some Fed presidents are already recorded against an increase of 50 basis points, I do not think that is likely."

Last week Wang said to Blockworks that he did not expect such interest increase in March, but one later remains possible.

"I suspect that you will be very aggressive - maybe an increase, every meeting, maybe even 50 basis points at a meeting in the future," said Wang.

The probability of an increase of 50 basis points in March lies according to the information at about 27 % Fed- Fonds-Futures . An increase of 25 basis points is about 73 % likely.

"The FED has not started a rate cycle with an increase of 50 basis points since 1990," wrote Nicholas Colas, co -founder of Datatrek Research, recently in a message. "Such a step would therefore be very unusual, but the chairman Powell has repeatedly said that the current environment is different from the recent past."

It is difficult to speculate when interest rate increases could begin, emphasized Wang.

"The Fed hates the market and the current futures prices are too unclear," said Wang. "I assume that Fed spokesman will come out in the coming days to clearly telegraph in both directions. But you probably don't know what to do yet."

The next meeting of the Federal Open Market Committee of the Fed is planned for March 15 and 16. A summary of the business forecasts is also published after the meeting.

. .

The article analysts weigh the likelihood of interest rate increases in March, since the consumer price index is again disappointed.