Stocks Plunge as Hot Inflation Report Ignites Fear Fed Will Wait to Cut Interest Rates

Published on February 13, 2024

Hotter-than-expected inflation data triggered a selloff in the financial markets as the latest Consumer Price Index (CPI) figures may have served as a roadblock in the Federal Reserve’s plans to cut interest rates this year. The annual inflation rate ticked down to 3.1 percent last month, higher than the consensus estimate of 2.9 percent. Core inflation, which strips the volatile energy and food components, was unchanged at a higher-than-expected 3.9 percent. On a monthly basis, the CPI and core CPI rose 0.3 percent and 0.4 percent, respectively. Both readings topped economists’ expectations. When concentrating on the Fed’s preferred supercore inflation, a gauge of sticky inflationary pressures like labor-intensive services excluding energy and housing, the inflation picture is a bit trickier to navigate. It advanced to 4.3 percent year over year and swelled 0.8 percent from December to January....

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