Eyes on US February Inflation... War Concerns Remain

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Hyunjung] This week, the U.S. Consumer Price Index (CPI) for February will be released. Amid the sharp inflation surge not seen in over 40 years in the U.S., concerns over the expansion of the war due to Russia's invasion of Ukraine are intensifying, raising fears that global markets will experience high volatility.

On the 10th of this week, the U.S. CPI will be announced. In January, the U.S. CPI inflation rate soared to 7.5%, the highest inflation rate in 40 years since February 1980, significantly exceeding market expectations of 7.2%.

The U.S. Producer Price Index (PPI) for January also surged more than twice the expected rate, rising 9.7% compared to a year earlier. The CPI typically follows the PPI with a lag.

Experts from The Wall Street Journal (WSJ) forecast that the February CPI increased by 7.8% year-over-year. This figure is drawing particular attention as it will be released ahead of the U.S. Federal Reserve's Federal Open Market Committee (FOMC) meeting in March.

Earlier, Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee last week, stating, "I would support a 25 basis points (bp) rate hike at the March meeting two weeks from now," emphasizing that "interest rates that are too low are no longer appropriate for the economy."

The war between Russia and Ukraine is also heightening global tensions. Although a temporary ceasefire was announced for civilian evacuations, Ukrainian authorities claim that Russia has not stopped its attacks.

On the 8th, Europe's fourth-quarter Gross Domestic Product (GDP) will be released, along with the U.S. January trade balance.

On the 10th, the European Central Bank (ECB) will decide on its benchmark interest rate. The ECB has kept its benchmark rate at 0% since 2016.

This content was produced with the assistance of AI translation services.