US consumer prices rose more than expected in January, adding to fears that inflationary pressures could lead the Federal Reserve to 'tighten monetary policy' at a faster pace.
The Consumer Price Index, or CPI, increased 0.5 percent in January, above expectations for a gain of 0.3 percent, according to data from the Department of Labor. The year-over-year increase was 2.1 percent, above expectations for a 1.9 percent gain.
Core CPI, which excludes volatile food and energy components, rose 0.3 percent from the previous month, above forecasts of 0.2 percent. It is up 1.8 percent on a year-over-year basis. Economists had expected 1.7 percent.
Markets reacted immediately. Before the release of CPI, stock market futures indicated the market would open higher. With the news, stocks are set to open higher. Bond yields rose.
Investors have been focused on the question of inflation in recent weeks. Many believe that higher inflation could prompt the Federal Reserve to raise interest rates at a faster pace, which could shadder the 'economic' fantasy Americans continue to feel good about.https://archive.fo/DlHlM
The current US economic system is broke, but has been for a long long time. The Fed has devalued our currency, via massive debt creation, by 98+ %
since Nixon defused the dollar from the gold standard in 1971.
When Nixon scrapped the US gold standard, we defaulted on the Bretton Woods Agreement of 1944 (which was why the US became a massive superpower and economic powerhouse right after WWII).
Nixon and his sidekick, Secretary of State Henry Kissinger, knew that their destruction of the international gold standard under the Bretton Woods arrangement would cause a decline in the artificial global demand of the US dollar. Later they set up agreements with OPEC nations to set up a US global reserve currency which would be tied to global oil trade, known as the US Petrodollar. In order for other countries to buy oil from these OPEC nations, they needed to exchange their currencies for US dollars, or US T-bonds.