Inflation rate picked up in January, CPI report shows. What it means.

(Wed. Feb.12th, 2025)Inflation accelerated in January, rising 3% on an annual basis, indicating that the Federal Reserve’s push to drive inflation down to a 2% annual rate has stalled out, at least temporarily.

The Consumer Price Index was forecast to rise 2.9% last month, according to economists polled by financial-data firm FactSet. The CPI, a basket of goods and services typically bought by consumers, tracks the change in those prices over time.

On a monthly basis, the CPI rose 0.5%, versus economists’ forecast for a 0.3% increase, according to FactSet. That’s the biggest monthly jump since August 2023. It may be due to price increases set at the start of the year by many businesses, noted Bright MLS chief economist Lisa Sturtevant in an email.

The report, which marks the fourth consecutive month of higher inflation, showed that the following items saw price increases on a month-over-month basis.

• Eggs: 15.2%
• Fuel oil: 6.2%
• Used cars and trucks: 2.2%
• Auto insurance: 2%

What economists say

Recent sticky inflation data backs the Federal Reserve’s decision last month to hit the brakes on additional rate cuts, economists say. On Feb. 11, Fed Chair Jerome Powell told the Senate Banking Committee that the central bank does “not need to be in a hurry” to pare rates further.

Gold price solidly down on profit taking, hot U.S. inflation report

(Kitco News) – Gold and silver prices are lower in early U.S. trading Wednesday. More profit-taking from the shorter-term futures traders is featured. A hot U.S. inflation report just released added to the selling pressure in the precious metals. April gold was last down $39.50 at $2,893.50. March silver prices were last down $0.327 at $31.995.

The U.S. data point of the week saw the consumer price index for January coming in up 3.0% annually. CPI was seen coming in up 2.9%, year-on-year. The “core” CPI, which excludes food and energy, was up 3.3% and was expected to come in up 3.1% annually. These numbers are the hottest in months and fall into the camp of the U.S. monetary policy hawks, who want to see the Fed hold off on cutting rates.

Asian and European shares were mixed to firmer in trading overnight. U.S. stock indexes are set to open solidly lower after the hot U.S. inflation report.

Federal Reserve Chairman Jerome Powell will address the U.S. House Financial Services Committee today, after speaking to a U.S. Senate committee Tuesday. Powell told the Senate committee the Fed is in no rush to cut interest rates further because it doesn’t want to hinder the fight against price inflation. However, President Trump came out on social media today and said the U.S. needs lower interest rates. Today’s hot CPI data “puts the Fed in a box,” said a CNBC reporter.

Bloomberg reports China’s property crisis shows no signs of letting up. “Authorities were forced into a first mainland rescue and the bonds of Hong Kong developer New World are sinking into distress territory.”

The key outside markets today see the U.S. dollar index solidly up after the hot CPI data. Nymex crude oil futures prices are lower and trading around $72.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.633% and on the rise after the CPI report.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report, real earnings and the Treasury monthly budget statement.

Technically, April gold futures bulls have the strong overall near-term technical advantage. Prices are trending up on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $3,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,800.00. First resistance is seen at $2,900.00 and then at the overnight high of $2,927.90. First support is seen at this week’s low of $2,879.90 and then at $2,855.00.

March silver futures bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $34.00. The next downside price objective for the bears is closing prices below solid support at $31.00. First resistance is seen at the overnight high of $32.415 and then at this week’s high of $32.805. Next support is seen at this week’s low of $31.65 and then at $31.25.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com