US inflation cools more than expected in January
Consumer prices rose 0.2% in January from a month earlier, according to data released by the Bureau of Labor Statistics on Friday morning, a cooler rise than economists had expected. The inflation measure rose 2.4% on the year.
The so-called “core” consumer price index, which includes the mostly volatile food and energy categories, rose 0.3% from the previous month and 2.5% from a year earlier.
The headline inflation was below economists’ expectations of a gain of 0.3% on a monthly basis and 2.5% on an annual basis. January’s core CPI readings were in line with expectations month-over-month and year-over-year.
Readings on inflation changed traders’ outlook for a rate cut from the Federal Reserve, now pricing in a 51% chance of at least a 25 basis-point cut at the Fed’s June meeting. However, traders are widely confident that the Fed will keep rates steady at the upcoming March meeting, pricing in less than a 10% rate cut at that meeting.