Prices increased 0.4% in February (month-over-month CPI), slightly higher than the forecasted 0.3%. This brought year-over-year inflation to 3.2% Headline and 3.8% Core. Equity markets were largely unphased, as the print did little to change investors’ expectations for a first rate cut in June.
Our chart illustrates that just a few goods-and-services categories have propelled inflation higher. Shelter (housing) inflation remains elevated despite a moderation of home and rent costs in recent quarters, as official government shelter data tends to be lagged. This has kept inflation figures elevated. Two other notable categories which contributed to inflation include motor vehicle insurance, as higher car prices have significantly pushed the cost of insurance upwards, and food away from home (restaurants).
The Verus Market Note provides market commentary along with relevant charts and graphs. Each week, we highlight a key story from the finance world that we believe will pique your interest. While these insights are meant to inform and enrich your understanding of the current market landscape, they should not be taken as direct recommendations for immediate portfolio adjustments.
