Fuelled by higher housing costs, US inflation rose higher than expected in December, testing markets' optimism as they anticipate the Federal Reserve will cut interest rates this year
The Consumer Price Index rose 0.3 per cent last month after a 0.1 per cent gain in November, the Labour Department reported on Tuesday.
Inflation rose 3.4 per cent on an annual basis, up from 3.1 per cent in November. Economists polled by FactSet forecast inflation would rise 3.2 per cent year-on-year.
Core CPI – which excludes food and energy – had the same monthly increase as in November, of 0.3 per cent.
On an annual basis, core CPI rose 3.9 per cent, slightly higher than FactSet's 3.8 per cent projection but lower than November's 4 per cent reading.
Shelter contributed to half of the monthly all-items increase, the Labour Department reported.
Thursday's report – the first US inflation reading this year – comes as traders forecast when the Federal Reserve will cut interest rates this year, and by how much.
Ahead of the report, data from the CME Group showed most forecast the Fed to announce its first rate cut of this policy cycle in March.
Most expected interest rates to fall somewhere between 3.75 per cent and 4.25 per cent by the end of this year.
“I think March is probably too early … for a rate decline because I think we need to see some more evidence,” Federal Reserve Bank of Cleveland President Loretta Mester told Bloomberg TV.
Ms Mester, who will vote on the Fed's policy decisions this year, said that Thursday's report “shows there's more work to do” to bring inflation under control.
The Fed has raised interest rates 11 times in a row in its tightening cycle to the current rate of 5.4 per cent, hoping higher borrowing costs would cool demand.
Wall Street's major indexes soared when the Fed indicated at the end of last year that it would move from raising interest rates to cutting them.
But that momentum failed to carry into this year.
The US stock market was little changed when trading closed on Thursday.
The Dow Jones Industrial Average gained 0.04 per cent while the Nasdaq Composite rose by a near-zero percentage point. The S&P 500 also changed little, sliding by 0.07 per cent.
The US central bank's turnaround in December came as inflation declined significantly without a sharp rise in unemployment.
Markets' optimism on rate cuts stands in contrast to the Fed's own projections, however. The central bank's most recent estimations forecast three rate cuts this year.
And minutes released from a December 12-13 meeting showed officials are uncertain on when they might begin cutting rates.
The minutes also showed the Fed still believes rates will be elevated “for some time” until the central bank sees clear evidence it is moving down towards its long-term 2 per cent goal.
Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
65
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Winners
Best Men's Player of the Year: Kylian Mbappe (PSG)
Maradona Award for Best Goal Scorer of the Year: Robert Lewandowski (Bayern Munich)
TikTok Fans’ Player of the Year: Robert Lewandowski
Top Goal Scorer of All Time: Cristiano Ronaldo (Manchester United)
Best Women's Player of the Year: Alexia Putellas (Barcelona)
Best Men's Club of the Year: Chelsea
Best Women's Club of the Year: Barcelona
Best Defender of the Year: Leonardo Bonucci (Juventus/Italy)
Best Goalkeeper of the Year: Gianluigi Donnarumma (PSG/Italy)
Best Coach of the Year: Roberto Mancini (Italy)
Best National Team of the Year: Italy
Best Agent of the Year: Federico Pastorello
Best Sporting Director of the Year: Txiki Begiristain (Manchester City)
Player Career Award: Ronaldinho
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
TV: World Cup Qualifier 2018 matches will be aired on on OSN Sports HD Cricket channel
Leaderboard
63 - Mike Lorenzo-Vera (FRA)
64 - Rory McIlroy (NIR)
66 - Jon Rahm (ESP)
67 - Tom Lewis (ENG), Tommy Fleetwood (ENG)
68 - Rafael Cabrera-Bello (ESP), Marcus Kinhult (SWE)
69 - Justin Rose (ENG), Thomas Detry (BEL), Francesco Molinari (ITA), Danny Willett (ENG), Li Haotong (CHN), Matthias Schwab (AUT)
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
INDIA V SOUTH AFRICA
First Test: October 2-6, at Visakhapatnam
Second Test: October 10-14, at Maharashtra
Third Test: October 19-23, at Ranchi
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World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m
The five pillars of Islam
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PETER%20PAN%20%26%20WENDY
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