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Market Wire - US Inflation Hits New Four-Decade High

CalendarMarch 10, 2022
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Karl Schamotta - Chief Market Strategist, karl.schamotta@corpay.com

US consumer prices rose at the fastest pace in most American's lifetimes last month - and could rise further in March and April as the conflict in Ukraine pushes energy costs upward.

According to data released by the Bureau of Labor Statistics this morning, the consumer price index climbed 7.9 percent in February from the same period last year, up a seasonally-adjusted 0.8 percent from January. Jumps in gas, shelter, and food were the largest contributors to the increase, with gasoline alone responsible for almost a third of the headline growth.

With highly-volatile food and energy components excluded, core prices rose 6.4 percent year-over-year, up 0.5 percent over the prior month.

The data met forecasts precisely, leaving 10-year Treasury yields relatively unmoved, while the dollar climbed slightly against its major counterparts, holding onto some of the gains achieved overnight.

Risk-sensitive currencies are trading defensively after negotiations between Russia and Ukraine ended without apparent progress toward ending the conflict. Russian forces continue to advance, with artillery bombardments intensifying as Ukrainians fall back into dense urban areas.

Oil prices are recovering after falling sharply yesterday when Ukrainian sources said the country was willing to consider agreeing to Russian neutrality demands - and after an official from the United Arab Emirates argued for an increase in OPEC+ production levels. The West Texas Intermediate benchmark is holding near $112 a barrel, and Brent is changing hands for $114 after trading between $105 and $139 over the last three days.

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