January 2024 consumer price index unexpectedly increased higher than expected, will the Fed cut interest rates?

New data showed the US economy 's CPI rose 0.3% in January 2024, after rising 0.2% in December 2023. Annual adjustments to the CPI data released on February 9 generally showed inflation trending down after a spike in 2022.

Kinh tế Mỹ: Chỉ số giá tiêu dùng tháng 1/2024 bất ngờ tăng cao hơn kỳ vọng, Fed có cắt giảm lãi suất?

US Economy: Consumer Price Index in January 2024 unexpectedly increased higher than expected.

According to data released by the Bureau of Labor Statistics, under the US Department of Labor on February 13, the Consumer Price Index (CPI) of the world's largest economy increased more than expected in January, amid rising housing and health care costs, but the rising inflation trend is unlikely to change expectations that the US Federal Reserve (Fed) will start cutting interest rates in the first half of 2024.

Notably, in January 2024, the CPI of the world's largest economy increased by 3.1% compared to the same period in 2023. Previously, economists polled by Reuters forecast the CPI to increase by 0.2% in January 2024 and increase by 2.9% compared to the same period in 2023.

However, the annual increase in consumer prices has slowed sharply from a peak of 9.1% in June 2022.

While consumer prices remain high, the Fed’s measures to maintain inflation at 2% have improved significantly. The trend in the Personal Consumption Expenditures (PCE) price index slowed to an annual rate of 1.7% in Q4 2023, compared with 2.6% in Q3 2023. Meanwhile, the core PCE price index increased 2.0%, unchanged from Q3 2023.

After the Bureau of Labor Statistics announced a higher-than-expected CPI increase, key indexes on Wall Street immediately dropped to their lowest levels in the past week.

The market capitalization of “giants” such as Microsoft, Alphabet, Amazon and Meta Platforms immediately “evaporated” 1.2-2.2%; shares of semiconductor manufacturers such as Micron Technology, Advanced Micro Devices and Broadcom lost 2.5% to 4.5% of their value, causing the Philadelphia SE Semiconductor index to fall 2.5%.

At 9:42 a.m. on February 13, East Coast time (9:42 p.m. the same day, Hanoi time), the Dow Jones Industrial Average was recorded down 427.32 points, equivalent to 1.1%, to 38,370.06 points; the S&P 500 fell 66.94 points, equivalent to 1.33%, to 4,954.90 points; and the Nasdaq Composite fell 303.61 points, equivalent to 1.9%, to 15,638.94 points.

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