CPI 2.6% YOY To January, Core CPI 1.6% YOY, Inflation Flat Yet Rates Up (charts, data downloads)

The US Consumer Price Index, which measures inflation at the consumer level of the economy, increased 0.2% in January and 2.6% year-over-year through January. Excluding volatile oil and food costs from the readings, “Core” CPI for January decreased -0.1% and increased 1.6% YOY through January. You can automatically create charts and download historical CPI data by scrolling to our data section on the right side of the site, or visiting our Data page.

Consumer inflation for the month is within the Fed’s comfort zone of 1-2% and was actually less than expectations. If you click on the ‘All CPI, Month’ link in our Data section, it will display a chart at the top of the section where you can see how the volatility of food and especially energy prices causes inflation swings month to month. When this happens traders react accordingly. Rates are tied to bond trading and bonds normally rally on low inflation news (pushing rates down), but today markets are also contending with the Fed’s Discount Rate increase from .5% to .75% last night—this is a signal the Fed is shifting toward a tightening bias and rates are generally higher as a result.