© Reuters The Dow Jones plummeted, dropping more than 500 points, the CPI index ended the Fed’s dream of cutting interest rates in May.
InfoQuest – The Dow Jones Index fell more than 500 points after the US revealed that the Consumer Price Index (CPI) was higher than expected. This will be a factor that supports the United States Federal Reserve (Fed) to keep interest rates high for a longer period than expected.
As of 10:04 pm Thai time, the Dow Jones Industrial Average was at 38,290.23 points, down 507.15 points or 1.31%.
Investors pushed back expectations for the Fed’s first interest rate cut this year to June. than originally expected in May After the United States released the CPI index which was higher than expected today.
CME Group’s latest FedWatch Tool indicates that investors are putting 62.3% pressure on the Fed to maintain interest rates at 5.25-5.50% at its May meeting. This compares to a weight of only 39.3% yesterday.
In addition, investors pressured the Fed by 51.5% to cut interest rates by 0.25% to 5.00-5.25% at the June meeting. After giving only 41.9% weight yesterday
The US Department of Labor released the CPI index, which measures inflation in consumer spending. January today
The Headline CPI, which includes food and energy categories, rose 3.1% in January year on year. Above analysts’ expectations of 2.9% from 3.4% in December.
On a monthly basis, the headline CPI rose 0.3% in January, beating analysts’ expectations of 0.2% from 0.2% in December.
The Core CPI, which excludes food and energy, rose 3.9% in January year on year. Above analysts’ expectations of 3.7% from 3.9% in December.
On a monthly basis, the core CPI rose 0.4% in January, beating analysts’ expectations of 0.3% from 0.3% in December.
The market was also under pressure as US government bond yields over 10 years rose above 4.2% following the release of the CPI index.
The increase in the yield on the 10-year US government bond, which is the US government bond used as a reference in determining the price of debt instruments around the world. This includes US mortgage interest rates. It will cause consumers to have less money to spend. Meanwhile, the cost of paying off mortgage loans is increasing. And companies will face higher debt repayment costs. causing these companies to reduce investment and reduce dividend payments to investors
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