Market Wire, North America

US consumer inflation slowed as expected last month, but underlying prices rose by slightly more than forecast, helping support odds on a quarter-point hike at next week’s Federal Reserve. According to data published by the Bureau of Labor Statistics this morning, the headline consumer price index rose 6.0 percent in February from the same period last year, up 0.4 percent on a month-over-month basis. This aligned tightly with estimates from economists polled by the major data providers ahead of the release. Energy costs slipped -0.7 percent month-over-month as a -7.9-percent drop in fuel oil offset a 1-percent rise in gasoline prices....

The dollar and Treasury yields are surging ahead of Senate testimony, in which Federal Reserve Chair Powell will call recent economic data “stronger than expected,” and warn “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes” – verbiage that suggests a half percentage point hike is on the table for the central bank’s March meeting. In comments released on the Fed’s website prior to Powell’s appearance, the latest economic data have come in stronger than expected, which suggests that the ultimate level of interest...

The Federal Reserve’s preferred inflation measure exceeded expectations in January, bolstering the case for continued tightening in the months ahead. Data released by the Bureau of Economic Analysis this morning showed the core personal consumption expenditures index – targeted by the Fed – rose 0.6 percent in January from the prior month, up 4.7 percent year-over-year – topping consensus estimates. The overall personal consumption expenditures index was up 5.4 percent from a year ago, well above forecasts.  Personal income rose 0.6 percent month-over-month, led by a 0.9-percent increase in private sector wages and salaries, along with a substantial jump in...