US Inflation Figures Unsurprising as Government Bond Interest Rates Increase

The United States recently shared important data concerning consumer prices and the labor market. These figures have a significant impact on the economy and on the lives of American citizens, making them of utmost importance.

On Thursday, a noticeable trend was observed in the western markets where the interest rates on government bonds were increasing. However, by the time the inflation figures were announced, the fastest increase had already subsided.

Particularly in the United States, the interest rate on the 10-year government bond experienced a rise. By the afternoon, it was found to be 2.2 percentage points higher, standing at 4.290 percent.

In Europe, similar trends were observed. The interest rate on Germany’s 10-year government bond rose by 2.4 percentage points, reaching a rate of 2.481 percent. Over in Italy, it escalated by 3.3 percentage points, standing at 3.911 percent.

There was a significant amount of macro data released on Thursday, especially from the United States, providing the market with plenty of information to analyze and interpret.

For instance, in January, the United States saw a growth in private consumption by 0.2 percent compared to the previous month. This was in line with economists’ average growth prediction of 0.2 percent.

Alongside this, the PCE index, which serves as a measure of the prices consumers pay for goods and services, rose in January by 0.3 percent from the previous month. The corresponding floor price index also rose by 0.4 percent from the previous month. These figures were exactly in line with expectations, indicating no unexpected increase.

The PCE index is considered to be a reliable indicator of the country’s inflation development. As such, it is closely monitored by the central bank Fed when making decisions regarding the direction of interest rate policy.

On an annual basis, the PCE index increased by 2.8 percent, which was as expected.

In January, private income experienced a growth of 1.0 percent. This was higher than economists’ predicted monthly growth of 0.4 percent.

There was also new data regarding the development of the country’s labor market. For the week ending on February 24, there were 215,000 new applications for unemployment benefits registered in the United States. This was higher than the 201,000 applications in the previous week. Despite this, 210,000 new applications were expected, indicating that the country’s labor market remains strong with a historically low unemployment rate.

The inflation figures released in Germany also met expectations. The EU-harmonized prices rose by 2.7 percent on an annual basis in February, matching economists’ predictions.

Regarding the currency market, movements were minor. The dollar was quoted as unchanged against the euro at 0.9228 euros, and experienced a slight decrease against the Japanese yen, being quoted at 149.95 yen.