The USA inflation renews 40-year high

In the USA, the consumer price index rose 7.5 percent year-on-year in January.

On a monthly basis, inflation was 0.6 percent. The expectation for this data was determined as 0.4 percent.

The consumer price index, excluding food and energy, which is the core inflation indicator, increased above expectations on a monthly and annual basis.

Accordingly, monthly core inflation was 0.6 percent, exceeding the 0.5 percent expectation, while annual core inflation was recorded as 6 percent.

Market expects a 100 basis point rate hike from the Fed by July

After the strong US inflation, Fed swaps were priced by 100 basis points until July.

In the futures markets, a 25 basis point rate hike for March is being priced in from the Fed's front before the data.

In his evaluation before the data, Sonal Desai, CIO of Franklin Templeton Fixed Income, stated that the markets are a little optimistic for the second half of 2022 and expects inflation to decline sharply.

“For me, that's a little too optimistic because most of the factors that fuel inflation will still be with us,” Desai said. "The Fed is already behind the curve," he said.