January's Consumer Price Index (CPI) data exceeded economist expectations, showing inflation to have risen 3.0% annually. Reported Thursday morning, January's Producer Price Index (PPI) print also came out hotter than expected, as prices rose 0.4% month-over-month and 3.5% year-over-year.
Inflation Insights president Omair Sharif joins Catalysts to analyze what this data means for future inflation trends, including the Federal Reserve's preferred inflation gauge — the Personal Consumption Expenditures (PCE) — due out on Friday, February 28.
Sharif suggests that despite the hot PPI reading, it was still "good news" following yesterday's slightly elevated CPI report. He explains that the combination of these two indicators suggests the core PCE price index for January will "come in right around 0.25%."
"We're continuing to creep our way toward the Fed's 2% target," he tells Yahoo Finance while acknowledging that inflation in sectors like automobiles and shelter costs remain elevated.
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Nevertheless, he emphasizes that "that story that [Fed] Chair Powell has told about disinflation being in a good place is still very much intact."
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This post was written by Angel Smith