December 2022 CPI Analysis: The Market Manages a Modest Rebound, But What Next
1 min read · · Korean original
The US Consumer Price Index (CPI) for December has been released. The figures show a 6.5% rise from a year earlier and a 0.1% decline from the previous month, in line with market consensus. December's CPI can be read as a sign that prices, which had been climbing steeply, are starting to turn, and that inflation is gradually easing.
A Closer Look at December's CPI
You can find the detailed CPI components on the website of the US Bureau of Labor Statistics. Overall, December's CPI saw a large drop in the energy category, with gasoline prices in particular falling by about 9.4%. However, housing (+0.8%), transportation (+0.2%), and medical care (+0.1%) prices rose slightly.
The Rebound in Nasdaq and Bitcoin
Nasdaq and Bitcoin, which had been highly volatile around the CPI release, caught their breath for now and managed a 3–4% rebound. However, they seemed to be playing it somewhat cautiously.
Inflation is still a long way from the Fed's 2.0% target, and above all, initial jobless claims released that day came in below market expectations, showing that the labor market is holding firm despite the Fed's tightening. In other words, this gives the Fed a foothold to push its tightening policy a bit harder.
