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A new report on inflation is due this morning. Economists surveyed by Bloomberg forecast that the annual rate of price increases will slow to 6.2% in January following a decline to 6.5% in December. More broadly, inflation has cooled recently from  a 40-year high of 9.1% in June.

Last month’s consumer price index report paved the way for the Federal Reserve to hike rates by a traditional 0.25 percentage point, a significant shift from its more aggressive stance at prior meetings when it raised rates by 0.75 and 0.50 percentage points.

Stocks rallied in response to the Fed’s latest decision, anticipating that the central bank was closer to pausing rate hikes. But January’s surprising blowout jobs report, which showed U.S. employers added 517,000 new positions, will prompt the Fed to continue raising rates to lower inflation given the low unemployment rate, Fed Chairman Powell said last week.

CPI expectations: Inflation could ease faster than Fed believes, reducing need for rate hikes, easing recession risk

Today’s data will likely provide more clarity on the Fed’s game plan for the rest of the year. Follow along for live updates:

When is CPI released?

The Bureau of Labor Statistics will release the CPI report at 8:30 a.m. ET.

Dow futures

Futures trading for the Dow Jones Industrial Average are moving slightly higher leading up to the report’s release. The index is up over 1% for the past week.

AUSTIN, TEXAS – FEBRUARY 08: A customer shops for eggs at a H-E-B grocery store on February 08, 2023 in Austin, Texas. Wholesale egg prices have begun declining more than 50% since December record highs according to Urner Barry data. (Photo by Brandon Bell/Getty Images) ORG XMIT: 775938581 ORIG FILE ID: 1464257767

January CPI expectations

Economists surveyed by Bloomberg predict prices rose by 0.5% on a monthly basis from December’s 0.1% monthly increase. On an annual basis, they estimate a 6.2% rise in prices.

Current CPI inflation rate

The current rate of inflation is 6.5% on annual basis.

Next Fed meeting

The next meeting is scheduled for March 21-22.

Fed 2023 schedule: Here’s…


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