PRIMER: US consumer prices expected to continue rising in February

• Released at 13:30GMT/08:30EST. Inflation is expected to continue rising, with analysts predicting the annual metrics will rise to the highest since 1982.


• The consensus sees consumer prices rising +0.8% M/M in February (prev. +0.6%), and the annual measure is seen rising to 7.9% Y/Y (prev. 7.5%). The core measure of CPI is seen rising +0.5% M/M (prev. +0.6%), and to 6.4% Y/Y (prev. 6.0%).


• Chair Powell and other centrist Fed officials have guided us towards a 25bps rate hike at the March 16th FOMC, so it would take significant upside to switch the narrative back towards a 50bps move. However, given that the Biden Administration's top priority is inflation (apparently), any upside to the consensus may see pricing increase for a steeper rate trajectory this year.


• Since the Ukraine/Russia crisis, pricing for a 50bps March move has pared back significantly (money markets assign a 10% probability); over the rest of 2022, money markets now see almost six 25bps increment rate hikes - it had been seven before the crisis, but was around five last week.

10 Mar 2022 - 08:10- Fixed IncomeData- Source: Newsquawk