The Inflation Problem…

Stocks finished with sharp losses in the US on Thursday, dropping after the January consumer-price index showed a much hotter-than-expected 7.5% year over year jump. And Equities took another leg lower in afternoon trade after St. Louis Federal Reserve Bank President James Bullard told Bloomberg that he would like to see the central bank deliver 100 basis points, or 1 percentage point, worth of rate increases over its next three meetings.

The Dow Jones Industrial Average dropped 1.47%, to close near 35,242, while the S&P 500 fell 1.81%, to close near 4,504. The NASDAQ Composite tumble 2.1%, ending near 14,186.

The Treasury Yield shot higher, with the 10 year up 5.67% to 2.036 – cross the 2% level for the first time since 2019. The two year was up 18.62% to 1.599. The markets thinks rates are going higher faster.

US inflation hit a 40-year-high in January after food, electricity, and shelter drove a bigger than expected rise in the consumer price index and pushed financial markets to price in a higher chance the Federal Reserve will hike rates by 0.50 percentage points in just over a fortnight.

Excluding the volatile food and energy components, so-called core prices increased 6% from a year ago, the most since 1982, and 0.6% from a month earlier.

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

One thought on “The Inflation Problem…”

  1. – When I look at what the 3 month T-bil rate is (currently at 0.37%) I think one (1) FED rate hike is certain this month. But I am NOT willing to entertain the thought of 2 rate hikes (yet).
    – With the rising US 30 year yield (currently at 2.3%) I expect that the US housing market will get hit by this rising rate.
    – Keep in mind: RISING rates are DEFLATIONARY !!!!!!

Leave a Reply