Inflation Concerns on Hold with Today’s CPI

Dollar suffers broad based selling during today’s early US session as US CPI data came in as expected with +0.2% for February.  The prior January  +0.5% may have been an anomaly and is a relief to market participants.  Additionally, the US Dollar was weighed down today by political turmoil in the White House. Headline CPI accelerated to 2.2% year on year (yoy) with core CPI unchanged at 1.8% yoy, with both meeting expectations.

However, today’s CPI data will not change Fed’s path to hike in rates during next week’s 2 day Federal Open Market Committee meeting and likely hike rates again in June.  However, a 4th rate hike this year is looking unlikely unless CPI data between now and June shows unexpected rise.

West Texas Intermediate (WTI) remains firm holding above $60 currently at $60.62 ahead of tomorrows weekly crude oil inventories data to be released at 10:30 am EST.

On a separate note, US Secretary of State Rex Tillerson was fired by President Donald Trump after numerous clashes. Trump confirmed by tweeting “Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!”