close video Powell has ‘made it clear’ Fed will not ‘pivot’ on rates: Sica
Circle Squared Alternative Investments CEO Jeff Sica joins “Varney & Co.” to share his market outlook and breaks down his predictions for how the Federal Reserve will handle rate hikes going forward.
The consumer price index (CPI) set to be released Tuesday morning is expected to show inflation has eased, which would reinforce Federal Reserve Chair Jerome Powell's belief that disinflation is underway.
Still, economists anticipate elevated costs for everyday staples in a sign that prices remain stubbornly high.
A cashier checks out a customer at a Publix grocery store. (Jeffrey Greenberg / UCG / Universal Images Group via Getty Images / File / Getty Images)
Economists polled by Refinitiv expect the Labor Department to report that the CPI, a broad measure of the price of everyday goods that includes gasoline, groceries and rents, rose 0.5% last month after a surprise decline of 0.1% in December – and the anticipated increase will likely reflect higher costs for energy and food.
JANUARY RENTS HAD THE SMALLEST INCREASE SINCE MAY 2021
Prices are expected to decelerate to 6.2% year-over-year for January, below December’s 6.5% print. That would amount to the lowest reading since October 2021 and the seventh month in a row of slowing annual growth since a 9.1% surge in June, which marked the highest inflation rate in almost 41 years.
Customers shop in a store in Queens, New York, on Dec. 23, 2022. (Ziyu Julian Zhu / Xinhua via Getty Images / File / Getty Images)
Still, inflation is expected to remain roughly three times higher than the pre-pandemic average on an annualized basis, underscoring the persistent financial burden placed on millions of U.S. households by high prices.
JAMIE DIMON WARNS IT'S TOO EARLY TO DECLARE VICTORY AGAINST INFLATION
When factoring out volatile food and energy costs, the core consumer price index is anticipated to rise 0.4% in January, slightly above December’s 0.3% increase. Annually, core CPI is forecast to rise 5.5% in January, the lowest in 13 months and down from 5.7% the prior month.
It would also mark the fourth month of slower growth from September’s 6.6% increase, which was the highest in 40 years.
Federal Reserve Board Chairman Jerome Powell (Julia Nikhinson / Getty Images / File / Getty Images)
Powell has previously acknowledged that disinflation has begun, but the Fed chairman also says there is still a long way to go to reach the central bank’s desired 2.0% inflation rate.
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The markets initially welcomed this message, sending risk assets like stocks higher. But recent concerns that the Fed will keep rates higher for longer has investors worried about a policy mistake.
FOX Business' Charles Brady and Megan Henney contributed to this report.
