US CPI inflation continues to moderate, but near-term heat persists

MoM headline US CPI inflation ticked up to 0.4% in February, accelerating from the previous 0.3%, with YoY CPI inflation rising to 3.2% compared to the forecast hold at 3.1%. Core CPI numbers eased, but not as much as markets were hoping for, with MoM Core CPI holding at 0.4% instead of declining to the forecast 0.3%. YoY Core CPI ticked down to 3.8% from the previous 3.9%, but missed market forecasts of 3.7%.

Read More: US CPI inflation rises to 3.2% in February vs. 3.1% expected

An uptick in energy costs drove the uptick in near-term headline CPI, with over 60% of the increase in MoM CPI inflation coming from gasoline and shelter costs from owner’s equivalent rent.

According to Robert Frick, corporate economist at Navy Federal Credit Union, “Inflation continues to churn above 3%, and once again shelter costs were the main villain. With home prices expected to rise this year and rents falling only slowly, the long-awaited fall in shelter prices isn’t coming to the rescue any time soon.” Frick continued, “Reports like January’s and February’s aren’t going to prompt the Fed to lower rates quickly.”

Dow Jones Industrial Average technical outlook

The Dow Jones Industrial Average (DJIA) kicked off Tuesday’s trading near 38,820.00, whipsawing into a daily low near 38,600.00 on reaction to the mixed US CPI print before recovering and staging a thin rally into 39,060.00.

Profit-taking and headline fades dragged the equity index back into the day’s opening range and the major index is now grappling with chart territory around the 39,000.00 major price handle