U.S. Inflation Rose 0.6% In January, Largest Increase In Four Years

Summary

  • Year-over-year inflation rose 2.5%, the highest number in nearly five years.
  • Gasoline prices rose sharply in January, but core inflation still rose 0.3% without gasoline. The Federal Reserve will take note.
  • The report is welcome news for holders of I Bonds and TIPS, reversing a flat inflation index over the last three months.

Real my full analysis at SeekingAlpha.com

Also, I have updated by ‘Tracking Inflation and I Bonds‘ page with these new numbers.

And here are the new March inflation indexes for all Treasury Inflation-Protected Securities.

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3 Responses to U.S. Inflation Rose 0.6% In January, Largest Increase In Four Years

  1. Jay says:

    I’m curious as to why you regard higher inflation as “welcome news for holders of I Bonds and TIPS?” The increase in their holdings due to inflation simply results in their being able to buy exactly what they could buy previously … which would be no different if inflation was 0.0%.

    • tipswatch says:

      I don’t cheer for higher inflation, but especially with TIPS, an investment has an ‘expected’ rate of inflation and I would like to see inflation at least run that high. Otherwise, an investment in a nominal Treasury would be preferred.

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