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Latest CPI Inflation Report Makes January Fed Rate Cut Very Unlikely

1. Total CPI inflation accelerated to 2.9%, highest since July 2024. 2. Core CPI slightly decelerated to 3.2%, remaining elevated. 3. Fed unlikely to change rates on January 29 due to strong inflation data. 4. Potential rate cuts may occur in mid-2025 if inflation eases. 5. Expectations for future rate cuts remain low, impacting financial markets.

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FAQ

Why Neutral?

Current inflation data keeps Fed's rate cuts less likely, creating uncertainty. Past instances showed similar inflation led to volatile markets.

How important is it?

Current inflation data directly influences Fed policy, affecting market sentiment and growth.

Why Short Term?

Immediate market reactions may occur with upcoming Federal meetings. Long-term effects depend on subsequent economic data.

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