CPI data shows rising inflation at 0.5% MoM, 3.0% YoY. Market reacted with Treasury yields up, equity futures down. Click for more on the inflation data.

We finished 2024 with a slightly soft reading, but we began 2025 with a hot reading. Now, my admonition last month about the volatility of December data applies also to January data, although less so in CPI than in some other indicators. However, averaging December and January is probably the right approach.

Inflation worries were re-ignited after consumer prices rose faster than expected in January, with Wall Street experts expecting caution from the Federal Reserve while keeping a wary eye on further tariff action from Washington.