OPINION
Market Rating Before FOMC MeetingJan 31
U.S. Consumer Inflation Drops From 41-Year High
In this period, the core CPI was 5.9 percent, below the expectations of 0.3 percent monthly and 6.1 percent annually.
Looking at the details of the report announced by the Ministry; Food products increased by 1.1 percent in July, increasing by 10.9 percent on an annual basis. In this period, although the energy decreased by 4.6 monthly, it increased by 32.9 compared to the same period of the previous year.
While new vehicle prices increased by 0.6 percent and 10.4 percent annually in July, second-hand vehicle prices increased by 6.6 percent compared to 2021, while declining by 0.4 percent monthly.
In this period, a 0.1 percent decrease was reflected in clothing products compared to the previous month, while an increase of 5.1 percent was observed compared to the same period of the previous year. Despite a monthly decline of 0.5% in transportation services, an annual increase of 9.2 percent was observed, while health services, which increased by 0.4 percent in July, increased by 5.1 percent compared to the same month of the previous year. Finally, it was also mentioned in the details of the published report that there was an increase of 0.5 percent monthly and 5.7 percent annually in the housing group.
The dataset shows that; While supply chain disruptions due to the effects of the Ukraine war and the coronavirus closures in China continued to be the main reasons for price increases in the food sector, a monthly decrease was observed in energy products as a result of the decline in international commodity prices.
It is possible to say that the decline in vehicle sales and clothing is due to the weakening in domestic demand due to the U.S. Federal Reserve's (FED) interest rate hikes. However, it should be underlined that this has not become evident in the housing industry yet.
On the other hand, following the release of the data, the Fed's interest rate hike predictions in September shifted to 50 basis points in global markets, while a recovery in relatively risky assets was noticed as a result of reduced investor stress with the implications of this. The leading indicator SP500 index erased the losses of 3 months with 4 231 points. The NQ100, known as the technology index, also rose to the level of 13 465 with a gain of approximately 3.00 percent, while it is currently priced at 13 400 levels.
