The forecast for the first Fed’s rate cut in 2024 is now pushing back from June to July after January CPI inflation rises at a higher-than-expected rate.
The Consumer Price Index (CPI) for the US rose 3.1% YoY in January 2024, which was higher than the estimate of 2.9%. Prices also rose 0.3% MoM, higher than 0.2% expected.
Meanwhile, Core CPI, which excluded volatile food and energy prices, rose 3.9% YoY, compared to 3.7% expected. On a monthly basis, core CPI rose 0.4%, compared to 0.3% expected.
The market is now pricing in just four rate cuts in 2024 after the report of January CPI, down from 6-7 cuts expected earlier this year. Meanwhile, the Federal Reserve maintained its view for just three cuts this year.
Odds for a cut in March are now below 10%, while chances in May and June are also plummeting.
