Surging gasoline price boosts March US CPI
2022.04.12 16:07
FILE PHOTO: A vehicle waits in traffic next to displayed gasoline prices at a Mobil gas station in Beverly Boulevard in West Hollywood, California, U.S., March 10, 2022. Picture taken March 10, 2022. REUTERS/Bing Guan/File Photo
NEW YORK (Reuters) – U.S. monthly consumer prices increased by the most in 16-1/2 years in March as Russia’s war against Ukraine boosted the cost of gasoline to record highs, cementing the case for a 50 basis points interest rate hike from the Federal Reserve next month.
The consumer price index surged 1.2% last month, the biggest monthly gain since September 2005, the Labor Department said on Tuesday. The CPI advanced 0.8% in February.
In the 12 months through March, the CPI accelerated 8.5%. That was the largest year-on-year gain since December 1981 and followed a 7.9% jump in February. It was the sixth straight month of annual CPI readings north of 6%.
STORY:
MARKET REACTION:
STOCKS: S&P e-mini futures extended gains were last up 0.73%, pointing to a firm open on Wall Street
BONDS: Yields on benchmark 10-year notes fell to 2.7308%. Two-year Treasury yields fell to 2.4423%
FOREX: The dollar index turned 0.09% lower
COMMENTS:
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK
“Topline was ugly but the core rate was lower than we expected. This is not good news, but yields are coming off their high indicative of another bloodbath in the debt market.”
“The bottom line is inflation is going to stick around for a while, but we could see it begin to reverse in the summer months, provided we get some cooling off in agricultural and energy prices.”
“(Stock) futures are gaining strength, the market anticipated these numbers yesterday. Stocks are likely to have a positive trading session in anticipation of the banking earnings.”
“It’s nearly written in the stone that we’ll see a 50-basis-point rate hike in May and another in June. The Fed is behind the curve.”
(Compliled by the global Finance & Markets Breaking News team)
