Inflation data caused a bit of a selloff Tuesday as the S&P 500 fell 0.61% and the NASDAQ 0.32%. Inflation has been very benign in the U.S. during this Fed easing cycle and appears to be the only thing aside from a booming economy that will move the Fed to tighten. While today’s numbers were really quite benign, some pointed to the core CPI figure as a thing to worry about – but reality is it will take months on end of unexpected inflation to really force the Fed’s hand.
U.S. Consumer Price Index rose 0.2% in February, in line with analysts’ expectations, the Labor Department said. The gain came after dropping 0.7% the previous month. The so-called core CPI, which strips out food and energy costs, increased 0.2% in February after a similar gain in January. In the 12 months through February, the core CPI rose 1.7%, the largest increase since November.
In other economic news, February new home sales rose 7.8% to 539,000, the highest level in seven years.Continue reading