The data released last week provided further evidence of upward pressure on inflation. The CPI increased 0.5% in January after rising a revised 0.2% in December. The core rate rose 0.3% which takes the YOY increase up to 1.8%. The PPI increased by 0.4% for the month, up from no change in December. The core rate was also up 0.4% and the YOY change for the core stands at 2.2%. These higher numbers are the contributing factor to rising inflation risk being priced in the bond market.

They also will drive the Fed to raise managed rates at the March FOMC meeting in spite of the volatility in the equity market. The weak data included both retail sales and industrial production…

ProBank Austin Advisor – February 19, 2018