The Bureau of Labor Statistics reported a 3.1% headline CPI year-over-year increase in January, which was down from 3.4% in December, but higher than the 2.9% the Cleveland Fed’s inflation NowCasting model has been predicting. This inflation reading was a nasty surprise, which pushed back market expectations of imminent interest rate cuts, while the swap market raised its prediction that inflation would be 3.3% in one year’s time, having been 2.0% at the beginning of the year.
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By: Hubert Marleau
