US Consumer Price Index

[hagadol]

If the US Consumer Price Index changes higher or lower than expectation, what is the likely effect on the market ?

See article below, just published:



Rising energy costs boost U.S. consumer prices in Jan. By Greg Robb
WASHINGTON (CBS.MW) -- Consumer prices rose a sharp 0.5 percent in January, the Labor Department reported Friday. This is the largest gain in the CPI since Feb. 2003. Over three-fourths of the increase in the consumer price index came from higher energy costs, which rose 4.7 percent. Excluding food and energy costs, the core CPI rose 0.2 percent in January. Over the past 12 months, the CPI has risen 1.9 percent. The core rate is up 1.1 percent. Economists were expecting the CPI to rise 0.3 percent and the core rate to rise 0.1 percent.

 

[mully]

It is not the news itself that is important, but how the market reacts that is the key.

 

[One Eyed Shark]

Higher CPI (inflation) = potentially higher interest rates = potentially higher dollar = money flows out of stocks into cash and the stocks take a dive...............potentially :cheesy: