US January CPI hotter than expected! Could the Fed's first rate cut be delayed until the second half of the year?
US January CPI failed to return to the "2 era", traders bet that the Fed's rate cut will be delayed until July, and gold plunged more than $20...\n\nThe US Department of Labor reported on Tuesday that the January CPI exceeded expectations and failed to return to the "2 era" due to pressure on consumers from stubbornly high housing prices.\n\nThe unadjusted year-on-year CPI in the US in January was 3.1%, higher than the expected 2.9%, and lower than the previous value of 3.40%; the month-on-month rate was 0.3%, higher than the expected 0.20%, and the same as the previous value of 0.30%. The unadjusted year-on-year core CPI in the US in January was 3.9%, exceeding the expected 3.7%, and the same as the previous value of 3.90%; the month-on-month rate was 0.4%, the largest increase since May last year, exceeding the expected 0.30% and the previous value of 0.30%.\n\nAfter the data was released, the US dollar index's short-term gains expanded to more than 60 points, with an intraday gain of 0.50%; spot gold fell more than $20 in a short period, falling below $2010 per ounce, the first time since January 25. US 2- to 5-year Treasury yields rose by at least 15 basis points that day. Non-US currencies fell across the board. S&P 500 index futures fell sharply in the short term, with an intraday drop of 0.8%, compared to 0.3% before the data release.\n\nIn one minute between 21:30 and 21:31 Beijing time on February 13, the most active gold futures contract on COMEX saw an instantaneous transaction of 5692 lots, with a total contract value of $1.159 billion.\n\nIn one minute between 21:47 and 21:48 Beijing time on February 13, the most active gold futures contract on COMEX saw an instantaneous transaction of 4881 lots, with a total contract value of $986 million.\n\nFollowing the strong inflation data, US short-term interest rate futures traders bet that the Fed will not cut interest rates before June. The swap market priced in less than 100 basis points of Fed rate cuts in 2024 and fully priced in a delay of the Fed's rate cut from June to July. Institutions commented on the US CPI data, saying that the overall US CPI is still in the "30s", raising questions about whether the Fed can cut interest rates in May.\n\nInstitutions pointed out that housing rents have once again become a factor driving inflation; after a month-on-month increase of 0.4% in December, the housing inflation index rose by 0.6% month-on-month in January. The higher-than-expected increase in the US January CPI highlights the bumpy road to fighting inflation.\n\nHowever, economists pointed out that the rise in inflation may be temporary, which may not change the expectation that the Fed will start cutting interest rates in the first half of this year. Previously, the Bureau of Labor Statistics removed seasonal fluctuations from the data model. When calculating the January CPI data, new weights were used, with the proportion of housing increasing and the proportion of new and used cars decreasing. This may partly explain why the data was stronger than expected.\n\nAnalyst Cameron Crise said that a March rate cut could be more decisively ruled out of the negotiations, and since you've done that, maybe May could be ruled out as well. The January US CPI data exceeded expectations on both an overall and core basis. To make matters worse, the overall year-on-year figure didn't even fall below 3%, but rather 3.1%. This is clearly allowing the hawks at the Fed to spread their wings again, while the doves may return to their nests, at least in the short term. No single piece of data may be decisive, but after the Fed's recent communication and strong employment data, there is clearly no urgent need for a quick rate cut, and if anything, the focus on persistent inflation risks remains paramount.
Time:
2024-02-14 21:32
US January CPI failed to return to the "2 era", traders bet that the Fed's rate cut will be delayed until July, and gold briefly plunged by more than $20...
The US Department of Labor reported on Tuesday that the January CPI exceeded expectations and failed to return to the "2 era" due to pressure on consumers from stubbornly high housing prices.
The unadjusted year-on-year US CPI in January was 3.1%, higher than the expected 2.9% and lower than the previous value of 3.40%; the month-on-month rate was 0.3%, higher than the expected 0.20% and the same as the previous value of 0.30%. The unadjusted year-on-year core CPI in the US in January was 3.9%, exceeding the expected 3.7% and the same as the previous value of 3.90%; the month-on-month rate was 0.4%, the largest increase since May last year, exceeding the expected 0.30% and the previous value of 0.30%.
After the data was released, the US dollar index's short-term gains expanded by more than 60 points, with an intraday gain of 0.50%; spot gold fell by more than $20 in a short period, falling below $2010 per ounce, the first time since January 25. US 2- to 5-year Treasury yields rose by at least 15 basis points that day. Non-US currencies fell across the board. S&P 500 index futures fell sharply in the short term, with an intraday drop of 0.8%, compared to 0.3% before the data release.
COMEX most active gold futures contract traded 5692 lots in one minute between 21:30 and 21:31 Beijing time on February 13, with a total contract value of $1.159 billion.
COMEX most active gold futures contract traded 4881 lots in one minute between 21:47 and 21:48 Beijing time on February 13, with a total contract value of $986 million.
Following the strong inflation data, US short-term interest rate futures traders bet that the Fed will not cut rates before June. The swap market priced in less than 100 basis points of Fed rate cuts in 2024 and fully priced in a delay of Fed rate cuts from June to July. Institutions commented on the US CPI data, stating that the overall US CPI is still in the "30s", raising questions about whether the Fed can cut rates in May.
Institutions pointed out that housing rents have once again become a factor driving inflation; the housing inflation index rose by 0.6% month-on-month in January, following a 0.4% month-on-month increase in December. The January US CPI growth exceeded expectations, highlighting the bumpy road to fighting inflation.
However, economists point out that the rise in inflation may be temporary, which may not change the expectation that the Fed will begin cutting interest rates in the first half of this year. Previously, the Bureau of Labor Statistics removed seasonal fluctuations from the data model. When calculating the January CPI data, new weights were used, with the proportion of housing increasing and the proportion of new and used cars decreasing. This may partly explain why the data was stronger than expected.
Analyst Cameron Crise said that March rate cuts could be more decisively ruled out of the negotiations, and since you've done that, maybe May could be ruled out as well. The January US CPI data exceeded expectations on both an overall and core basis. To make matters worse, the overall year-on-year figure didn't even fall below 3%, but rather 3.1%. This is clearly allowing the hawks at the Fed to spread their wings again, while the doves may return to their nests, at least in the short term. No single data point may be decisive, but after the Fed's recent communication and strong employment data, there is clearly no urgent need for a quick rate cut, and if anything, concerns about persistent inflation risks remain paramount.
Related News
Gold prices continue to fluctuate.
Gold prices have shown a volatile pattern in the short term, affected by the weakening of the US dollar and changes in sentiment due to easing geopolitical tensions.
Gold prices rise again! Multiple risks fuel safe-haven demand.
From the perspective of the international market, the tense situation in the Middle East, the escalation of the Russia-Ukraine conflict, and the continued high uncertainty surrounding the US Trump administration's tariff policies have driven up gold prices due to increased risk aversion in the market. Furthermore, a significant recent change in the gold market is that gold has become the second-largest reserve asset for central banks globally. How should the future trend of gold prices be viewed? Several analysts have indicated that in the short term, gold prices may fluctuate due to factors such as tariff easing and sudden changes in the geopolitical situation; in the medium to long term, gold prices are still in an upward channel.
As the Russia-Ukraine conflict enters its third year, global attention is once again focused on this geopolitical crisis. According to Dow Jones Newswires, US President Donald Trump made startling remarks at the White House on Thursday (June 5), stating that neither Russia nor Ukraine is prepared for peace, and that both sides may "continue fighting" until one side is willing to compromise. This statement not only signals the failure of his attempts to broker peace, but also introduces new uncertainty to the global geopolitical and economic markets.
Recently, good news came from the China Machinery Metallurgy and Building Materials Workers' Technical Association. In the 2025 National Machinery Metallurgy and Building Materials Industry Workers' Technological Innovation Achievement Award, Shandong Guoda Gold Co., Ltd.'s "Purification of Crude Arsenic Flue Dust to Produce Arsenic Trioxide Industrial Application" and "Key Technology Application for High-Value Utilization of Complex Copper-Gold Ore Resources" projects won the first prize and the second prize respectively. This honor is a high recognition of the workers' technological innovation ability and the effectiveness of achievement transformation, and also fully demonstrates the company's outstanding strength in the industry.
Gold prices return to $3300! Wall Street banks show significant divergence in long-term outlook
In fact, as gold prices fluctuate, Wall Street's major banks have recently shown a clear divergence in their views on gold prices. Unlike Goldman Sachs and Deutsche Bank, which are optimistic about gold's performance, Citigroup believes that the long-term outlook for gold prices is not optimistic.
Although gold prices rose this week, market volatility has clearly increased. While the US-UK agreement is symbolic, its content is limited and insufficient to alleviate concerns about a global economic slowdown. Therefore, gold prices will continue to fluctuate between safe havens and policy signals, closely monitoring the Federal Reserve's interest rate expectations and global trade sentiment.