CPI Inflation Rate Shock Jolts Fed Policy Outlook; Dow Jones Tumbles
JED GRAHAM
04:49 PM ET 06/10/2022
The consumer price index came in hotter than expected in May, as the CPI inflation rate eclipsed March's 40-year peak. Following Thursday's stock market rout, the Dow Jones fell sharply after the CPI report, which shifted Wall Street expectations to half-point Fed rate hikes at the next three or even four meetings.
The CPI rose 1% from the prior month and 8.6% from a year ago, compared to inflation rates of 8.3% in April and 8.5% in March. The core CPI, which strips out volatile food and energy categories, rose 0.6% from April. Still, the annual core inflation rate eased to 6% from the prior month's 6.2% reading. March's 6.5% core inflation rate was the highest since August 1982.
Economists expected the overall CPI to rise 0.7% on the month as the annual CPI inflation rate slipped to 8.2%. The core CPI was seen rising 0.5% vs. April and 5.9% from a year ago.
Nonenergy services inflation, which affects 57% of consumer budgets, rose 5.2% from a year ago, topping April's 30-year high of 5.1%.
Goods prices, excluding food and energy, rose 0.7% on the month, bringing the annual inflation rate down to 8.5% from 9.7% in April.
Economists have been expecting goods prices to recede. However, it will take a significant cooling of services inflation for the Federal Reserve to adjust policy.
The 0.6% monthly rise in the core consumer price index, if sustained, would add up to a 7.2% annual core inflation rate. That compares to Federal Reserve projections of 4.1% core inflation in 2022. If inflation stays on pace to exceed projected Fed levels, policymakers probably will have to tighten further and faster than expected.
Keep in mind that the CPI differs from the Fed's preferred personal consumption expenditures price index. The latter includes government purchases on behalf of consumers such as by Medicare and Medicaid. It also factors in a substitution effect, when high prices lead consumers to adapt purchasing behavior.
Dow Jones, Treasury Yields Reaction To CPI Inflation Rate
The Dow Jones Industrial Average slid 2.7% in Friday stock market action. The S&P 500 sank 2.9% and the Nasdaq composite 3.5%.
JED GRAHAM
04:49 PM ET 06/10/2022
The consumer price index came in hotter than expected in May, as the CPI inflation rate eclipsed March's 40-year peak. Following Thursday's stock market rout, the Dow Jones fell sharply after the CPI report, which shifted Wall Street expectations to half-point Fed rate hikes at the next three or even four meetings.
The CPI rose 1% from the prior month and 8.6% from a year ago, compared to inflation rates of 8.3% in April and 8.5% in March. The core CPI, which strips out volatile food and energy categories, rose 0.6% from April. Still, the annual core inflation rate eased to 6% from the prior month's 6.2% reading. March's 6.5% core inflation rate was the highest since August 1982.
Economists expected the overall CPI to rise 0.7% on the month as the annual CPI inflation rate slipped to 8.2%. The core CPI was seen rising 0.5% vs. April and 5.9% from a year ago.
Non energy services inflation, which affects 57% of consumer budgets, rose 5.2% from a year ago, topping April's 30-year high of 5.1%.
Goods prices, excluding food and energy, rose 0.7% on the month, bringing the annual inflation rate down to 8.5% from 9.7% in April.
Economists have been expecting goods prices to recede. However, it will take a significant cooling of services inflation for the Federal Reserve to adjust policy.
The 0.6% monthly rise in the core consumer price index, if sustained, would add up to a 7.2% annual core inflation rate. That compares to Federal Reserve projections of 4.1% core inflation in 2022. If inflation stays on pace to exceed projected Fed levels, policymakers probably will have to tighten further and faster than expected.
Keep in mind that the CPI differs from the Fed's preferred personal consumption expenditures price index. The latter includes government purchases on behalf of consumers such as by Medicare and Medicaid. It also factors in a substitution effect, when high prices lead consumers to adapt purchasing behavior.
Dow Jones, Treasury Yields Reaction To CPI Inflation Rate
The Dow Jones Industrial Average slid 2.7% in Friday stock market action. The S&P 500 sank 2.9% and the Nasdaq composite 3.5%...."
investors daily.com
JED GRAHAM
04:49 PM ET 06/10/2022
The consumer price index came in hotter than expected in May, as the CPI inflation rate eclipsed March's 40-year peak. Following Thursday's stock market rout, the Dow Jones fell sharply after the CPI report, which shifted Wall Street expectations to half-point Fed rate hikes at the next three or even four meetings.
The CPI rose 1% from the prior month and 8.6% from a year ago, compared to inflation rates of 8.3% in April and 8.5% in March. The core CPI, which strips out volatile food and energy categories, rose 0.6% from April. Still, the annual core inflation rate eased to 6% from the prior month's 6.2% reading. March's 6.5% core inflation rate was the highest since August 1982.
Economists expected the overall CPI to rise 0.7% on the month as the annual CPI inflation rate slipped to 8.2%. The core CPI was seen rising 0.5% vs. April and 5.9% from a year ago.
Nonenergy services inflation, which affects 57% of consumer budgets, rose 5.2% from a year ago, topping April's 30-year high of 5.1%.
Goods prices, excluding food and energy, rose 0.7% on the month, bringing the annual inflation rate down to 8.5% from 9.7% in April.
Economists have been expecting goods prices to recede. However, it will take a significant cooling of services inflation for the Federal Reserve to adjust policy.
The 0.6% monthly rise in the core consumer price index, if sustained, would add up to a 7.2% annual core inflation rate. That compares to Federal Reserve projections of 4.1% core inflation in 2022. If inflation stays on pace to exceed projected Fed levels, policymakers probably will have to tighten further and faster than expected.
Keep in mind that the CPI differs from the Fed's preferred personal consumption expenditures price index. The latter includes government purchases on behalf of consumers such as by Medicare and Medicaid. It also factors in a substitution effect, when high prices lead consumers to adapt purchasing behavior.
Dow Jones, Treasury Yields Reaction To CPI Inflation Rate
The Dow Jones Industrial Average slid 2.7% in Friday stock market action. The S&P 500 sank 2.9% and the Nasdaq composite 3.5%.
JED GRAHAM
04:49 PM ET 06/10/2022
The consumer price index came in hotter than expected in May, as the CPI inflation rate eclipsed March's 40-year peak. Following Thursday's stock market rout, the Dow Jones fell sharply after the CPI report, which shifted Wall Street expectations to half-point Fed rate hikes at the next three or even four meetings.
The CPI rose 1% from the prior month and 8.6% from a year ago, compared to inflation rates of 8.3% in April and 8.5% in March. The core CPI, which strips out volatile food and energy categories, rose 0.6% from April. Still, the annual core inflation rate eased to 6% from the prior month's 6.2% reading. March's 6.5% core inflation rate was the highest since August 1982.
Economists expected the overall CPI to rise 0.7% on the month as the annual CPI inflation rate slipped to 8.2%. The core CPI was seen rising 0.5% vs. April and 5.9% from a year ago.
Non energy services inflation, which affects 57% of consumer budgets, rose 5.2% from a year ago, topping April's 30-year high of 5.1%.
Goods prices, excluding food and energy, rose 0.7% on the month, bringing the annual inflation rate down to 8.5% from 9.7% in April.
Economists have been expecting goods prices to recede. However, it will take a significant cooling of services inflation for the Federal Reserve to adjust policy.
The 0.6% monthly rise in the core consumer price index, if sustained, would add up to a 7.2% annual core inflation rate. That compares to Federal Reserve projections of 4.1% core inflation in 2022. If inflation stays on pace to exceed projected Fed levels, policymakers probably will have to tighten further and faster than expected.
Keep in mind that the CPI differs from the Fed's preferred personal consumption expenditures price index. The latter includes government purchases on behalf of consumers such as by Medicare and Medicaid. It also factors in a substitution effect, when high prices lead consumers to adapt purchasing behavior.
Dow Jones, Treasury Yields Reaction To CPI Inflation Rate
The Dow Jones Industrial Average slid 2.7% in Friday stock market action. The S&P 500 sank 2.9% and the Nasdaq composite 3.5%...."
investors daily.com