The latest US inflation statistics will be anxiously anticipated by investors worldwide. On Thursday, March 14, at 8:30 AM Eastern, the US Bureau of Labor Statistics (BLS) will announce February CPI figures for the United States. Today’s release of US consumer price index data has investors fretting over the prospect of persistent inflation.
The likelihood of a faster rate hike rate by the US Federal Reserve increases if US CPI data on March 14 shows that inflation is continuing sticky and shows no signs of calming down. In his Congressional testimony last week, the head of the US Federal Reserve was very explicit about his intention to maintain an aggressive stance toward rate hikes until inflation is controlled.
The US Federal Reserve continues to face a significant challenge in persistent inflation. Due to stronger-than-expected economic indications, Powell suggested in his congressional testimony on March 7 and 8 that the Fed will boost rates more quickly than anticipated. He said stronger-than-expected figures on factory output, consumer spending, and hiring pointed to persistent inflationary pressures.
While the SVB fiasco late last week may prevent the US Fed from maintaining tightening measures. The prolonged financial crisis has hurt the market while the Fed fights inflation. The impact of higher rates on bank balance sheets has been highlighted by the SVB crisis, which has spread to a few other regional banks in the United States.
Market participants may have to hold their breath until the March 22 announcement of the FOMC’s decision on whether or not to raise interest rates follows the Federal Open Market Committee’s March 21-22 meeting.
While the market anticipates annual inflation to drop below 6% in February, experts expect the CPI to rise 0.4% from the previous month, a slight decrease from January’s 0.5% increase.
The annual inflation rate in the United States declined for the sixth straight month in December 2022, reaching 6.5%, its lowest level since October 2021. January’s US consumer price index numbers were somewhat lower than expected, at 6.4%.
The number of people in the United States filing new claims for unemployment benefits rose to its highest level in five months last week. However, the overall trend was still indicative of a tight labor market.