- CPI surged 0.8% MoM (4 times the +0.2% expected) and exploded 4.2% YoY. That is the biggest YoY jump since Sept 2008 (and biggest MoM jump since June 2008).
- The core CPI rose 3.0% over the past 12 months; this was its largest 12-month increase since January 1996.
After the CPI data revealed inflation rose much higher than anticipated, U.S. equity-index futures increased their declines, leading to concerns that price increases for consumers would stifle recovery. Contracts for the Nasdaq 100, which is dominated by technology, fell sharply, while those for the benchmark S&P 500 also declined significantly.
The debate about whether inflation would be persistent enough to push the Federal Reserve to tighten policy faster than current guidance comes during a surge in global equities has been fueled by massive stimulus packages, prompting fears that valuations have been overvalued.
Hyperinflation here we come!