Bankinter: Inflation slowed less than expected in January, while core inflation also missed expectations. CPI was +3.1% year-on-year against +2.9% expected and +3.4% previously. Underlying was +3.9% versus +3.7% expected and +3.9% previously.
Assessment: Negative data for stock markets and bonds, as the general rate returns to the deceleration trend, but less than expected. On the core side, the reading repeats December’s figure, when a marginal decline was expected. This data works against a Fed that, since its meeting on 31 January, has been reinforcing the need to gain confidence in the good evolution of inflation. With the economy holding up better than expected, supported by a strong labour market, the Fed has no incentive to cut rates in the short term.
