X

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

(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.

story continues below

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. (Read more US economy stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
X
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.

X