Investors React To Brand-New US Inflation Data

Investors React To Brand-New US Inflation Data
Paul Allison, CFA

over 1 year ago1 min

File away your “farewell” cards, inflation isn’t going anywhere: the latest US consumer price index (CPI) showed prices were up a worse-than-expected 8.2% in September versus the same time last year, and 0.4% higher than they were in August. And sure, that bump in the index does drop down to 6.6% when you strip out volatile – but now cooling – food and energy prices, but that “core” CPI is still higher than the market had hoped for. After all, other components of the index are now running rampant: owner-equivalent rent – a measure of the cost of owning a house – posted its biggest monthly jump since 1990, and prices for transport and medical care services are only moving upward.

If inflation is a stubborn toddler, investors are sleep-deprived parents who are losing their patience: market futures took a steep drop immediately after the CPI figures came out, and the US looks poised for another heavy day of share selling as I write this.

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