Inflation Spikes, Cut in Jeopardy

Fed may have hands tied, as CPI soars past expectations

By Kevin Spak, Newser Staff

Posted Feb 20, 2008 9:04 AM CST

(Newser) – Core inflation bounded ahead of expectations in January, which is bad news for anyone betting on a big rate cut from the Fed–and for the Fed itself. The consumer price index rose 0.4%, with core CPI rising 0.3%, putting the year-over-year figures at 4.3% and 2.5% respectively, well above the Fed’s traditional 1.5%-2% comfort zone, the Wall Street Journal reports.

Investors have been expecting a half-point rate cut next month, on top of the 225 basis points slashed since September, but this data will force investors to reconsider, and certainly dashes any hopes of a bigger move. In another report, housing starts rose in January, for the first time since October, but the numbers were still lower than analyst predictions.

A currency exchange sign hangs on a street in Hong Kong, Thursday, Jan. 31, 2008. (AP Photo/Kin Cheung) (Associated Press)

(Shutterstock)

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Inflation Spikes, Cut in Jeopardy

Fed may have hands tied, as CPI soars past expectations

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CPI Registers Spring Spike

Energy, food drive big May bump in consumer spending as core inflation stays cool

Bernanke Signals New Rate Cuts

Says central bank 'will act as needed' to further minimize economic risks

Bernanke Hints at Hefty Interest Rate Cuts

Fed hopes to thwart troubled markets, unemployment

Fed Remains Open to More Rate Cuts

Minutes from last meeting display growing concern about markets

Fed Weighs Emergency Rate Cut

As economy deteriorates, inflation becomes less of a concern

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Inflation Spikes, Cut in Jeopardy

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OTHER STORIES ON OUR RADAR

inflation • Ben Bernanke • Federal Reserve • Consumer Price Index • core inflation • US economy • interest rate cut

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

CPI Registers Spring Spike

Energy, food drive big May bump in consumer spending as core inflation stays cool

Bernanke Signals New Rate Cuts

Says central bank 'will act as needed' to further minimize economic risks

Bernanke Hints at Hefty Interest Rate Cuts

Fed hopes to thwart troubled markets, unemployment

Fed Remains Open to More Rate Cuts

Minutes from last meeting display growing concern about markets

Fed Weighs Emergency Rate Cut

As economy deteriorates, inflation becomes less of a concern

About Us

Site

Newser By Users

Community

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What is Newser?