The markets were extremely quick to react upwards yesterday, after the “core” CPI inflation figure (underlying inflation, i.e. excluding food and energy) came out 0.1% below the consensus and the previous digit. That is to say 3.2% instead of 3.3%, that is to say anemic progress, but sufficient to excite certain market players…
Conversely, the price index published today did not provoke immediate reactions…even though it deserves our attention.
This is the import price index in the United States. There was no big variation in monthly data (only +0.1%) but in annual data the picture is different: +2.24%, the strongest progression since December 2022.
And this is data for the month of December, so well before the future administration and Donald Trump apply new customs duties. The market does not seem to have paid attention to it…but several members of the Fed in recent days have nevertheless emphasized this point.
Influential New York Fed President John Williams said yesterday that “government policy is the main source of uncertainty.” And even Austan Goolsbee, the Fed’s “dove”, declared that “If Congress and the President decide on policies that increase prices, the Fed must take them into account.”
The fight against “sticky” inflation is not over for the Fed, and the tone of the monetary institution’s communications should not change until, at least, March and the next quarterly projections.
One swallow doesn’t make spring, but that’s what the market was willing to believe with a fairly incredible rebound in American indices yesterday… a return to reality in the coming days?
Download our free Market Outlook 2025 guide: www.ig.com/fr/outlook-2025
Swiss
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