An Inflation Surprise Hits the Market

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You know that Bidenflation has taken a toll on America. Now, inflation is down, but it’s not out. A new report on CPI released this morning recorded slower inflation than the previous month but was higher than had been predicted.

But the damage is already done for many on a fixed income. For instance, food prices have already settled in at a whole new level.

Justin Lahart discusses the report in The Wall Street Journal, writing:

Inflation cooled again in January, but the declines may have paused.

The Labor Department reported Tuesday that consumer prices rose 3.1% in January from a year earlier, versus a December gain of 3.4%. That marked the lowest reading since June. Economists had predicted that price increases would fall to 2.9%.

Core prices, which exclude food and energy items in an effort to better track inflation’s underlying trend, were up 3.9%. That was equal to December’s gain, which was the lowest since mid-2021.

From a month earlier, overall prices were up 0.3%, and core prices were up 0.4%—larger gains than economists expected.

Stock futures fell and bond yields rose after the release, which fueled worries that firmer-than-expected inflation would reduce the probability of the Federal Reserve lowering interest rates in the coming months. Interest-rate futures, which before Tuesday’s report implied the central bank would probably begin cutting rates by its May meeting, now suggest a June start date is more likely.

Action Line: Become an inflation dodger, and save til it hurts. When you want to talk about inflation and your portfolio, I’m here. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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