By Geoffrey Smith Investing.com — The headline rate of inflation in the U.S. fell to its lowest since late 2021 in December, encouraging hopes that the Federal Reserve will soon be able to… Economists expect first quarter GDP growth – due out Friday – to rise as much as 20% year-on-year, setting China up for a nearly double-digit 2021 expansion thanks to a resurgence in global manufacturing and a sharp recovery in domestic spending. The core Consumer Price Index increased every month in September, increasing from 0.3 per cent in July to 0.6 per cent, matching the rate of August. US CPI data for the month of December has been released by The US Bureau of Labor Statistics. The year-on-year inflation number for December has fallen to 6.5% from 7.1% seen in November 2022.

Customers can approach any of the authorised banks, including SHCIL for such investment irrespective of whether they hold an account or not with that bank. On receipt of money, the bank will register the investor on the RBI’s web-based platform (E-Kuber) and on validation, generate the Certificate of Holding. Notably, it is the second consecutive record-breaking inflation rate as February’s figure had also registered a 40-year high year-on-year increase. A future risk to earnings is the threat of corporate tax rises from 21% currently, as proposed by US President Joe Biden. A 28% tax rate would take 7.4% off S&P 500 companies’ earnings per share, UBS estimates. Investors are fretting policymakers will pedal back on the easy pandemic monetary conditions, and blue chips logged their worst month in a year in March.

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So, overall, the early sessions may levitate in either direction with so much to assimilate for traders,” says Kunal Sawhney, CEO, Kalkine Media. Therefore, often inflation is the deciding factor for RBI’s monetary policy. While the inflation rate is still at a multi-decade high, this was the lowest level since October 2021 and witnessed a decline from the 9.1 per cent reached in June 2022. BOTH CONSUMER Price Index and the Wholesale Price Index data are due for release this week.

“We expect the latest U.S. inflation data will keep the global stock market rally on track. The markets now await the next FOMC decision on interest rates, but until then, the rally is set to continue,” adds Green. The all-items index increased 6.5 percent for the 12 months ending December; this was the smallest 12-month increase since the period ending October 2021. All items less food and energy index rose 5.7 percent over the last 12 months, compared to 6% in November.

• The Biden administration seeks to keep control of Congress in the polls, but the rising prices of goods can dent their political aspiration as the soaring inflation rate has caused severe hardships for Americans.
• Recognising this, three additional exclusion based measures – one excluding fuel group and metals sub-group and another excluding fuel group, metals sub-group and non-food primary articles sub group – were also considered in the study.
• For example, if last payable coupon is Rs. 1,000/-, then Rs. 500 would be charged as penalty..
• Explanatory power of regression with only core as the independent variable is generally not very high.
• If the CPI drops, that means there is deflation, or a steady reduction in the prices of goods and services.

For this RBI may increase repo rates, which will make it difficult for the banks to borrow money from the RBI, ultimately reducing liquidity in the economy. CPI is calculated for a fixed basket of goods and services that may or may not be altered by the government from time to time. It is used as an essential economic tool by central and state governments, the Reserve Bank of India, which is the central bank of our country for maintaining money supply, price stability. CPI is an essential tool for RBI as it looks after the monetary policies of the country. The framework by RBI requires it to keep the inflation rate around 4% however it can fluctuate anywhere between 2% and 6%.

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On Thursday, the Bank of England raised its annual GDP forecast to 7.25% from 5% pegged in February. With the second wave of covid-19 still raging in the country, investors will likely be more interested in how the companies project their performance in the coming months. Come Friday, any hint of stronger-than-expected outlook could lift market sentiments for the sector. The BSE-Healthcare index has already gained 10% since mid-February against a 6% loss for the benchmark 30-stock Sensex as the virus has spread. For Dr Reddy’s, one big reason for optimism is its role in selling Russia’s Sputnik-V vaccine in India.

The banks through which these securities have been purchased will provide other customer services. Investors can invest through the authorised banks and Stock Holding Corporation of India . Gains were also helped by comments from Fed official Susan Collins backing a quarter-point which data pertains to us inflation rate hike at the bank’s next policy decision on February 1. With optimism over China’s reopening already fuelling a rally across Asia, signs that the Fed’s long-running monetary tightening campaign is finally paying off have provided investors with more reason to be happy.

They are easy to communicate to public when compared with the pure statistical measures of core inflation. The criticism that such measures often face is that completely removing the volatile items is a very crude methodology and has the potential risk of a permanent loss of significant information. Exclusion-based measures, although desirable from simplicity point of view, very often do not satisfy economic criteria.

If everything is in order, the investor has to be paid immediately on the maturity date for payments through electronic mode and within maximum five days for any payment through physical instruments. In case of redemption on maturity, the investor will be advised one month before maturity regarding the ensuing maturity of the bond advising them to provide a Letter of Acquaintance, confirming the NEFT account details, etc. The maximum limit is Rs. 10 lakh per annum for eligible individual investors and Rs. 25 lakh per annum for institutions such as HUFs, Charitable Trusts, Education Endowments and similar institutions which are not pro-profit in nature. After receiving the money and registration of the investor on RBI’s CBS (E-Kuber), the RBI will open a BLA for each investor and issue a “Certificate of Holding” indicating number of units of IINSS-C held by the investor.

How is CPI calculated in India?

Explanatory power of regression with only core as the independent variable is generally not very high. The explanatory power of the equation improves with the inclusion of activity variables. Price stability as defined by ‘low and stable inflation’ being one of the key objectives, the Reserve Bank monitors a range of price indices both at aggregate and disaggregated levels [RBI ]. Changes in the wholesale price inflation is taken as the headline inflation for policy articulation and within the WPI, non-food manufactured products inflation is considered the core inflation [Mohanty ]. However, several other central banks normally use headline inflation, excluding food and energy, as measures of core inflation. An attempt, therefore, has been made in this paper to identify as to how non-food manufacturing inflation performs vis-a-vis some other measures of core inflation, normally used by several other central banks.

In late September, Jerome Powell, the chairman of the Fed, stated that the institution would keep interest rates high and continue to raise them until it is clear that inflation has been contained. September became the first month without an increase since May 2020 in the producer-price index for core goods. When adjusted for inflation and seasonality, the gross domestic product, a measure of overall consumer expenditure on goods and services, decreased at an annual pace of 1.1 per cent in the year’s first half. CPI measures the change in the price level of goods consumed by retail consumers, who are on the demand side of the economy. For the same reason, it can be interpreted that CPI measures the purchasing power of an economy’s currency. Annual US inflation in December fell to its lowest level at 6.5 per cent in more than a year, the recent data published by the Bureau of Labor Statistics showed on Thursday.

By Malvika Gurung Investing.com — There were major macroeconomic data released in India and the US on Thursday, Jan 12, 2023, which were keenly tracked by investors at home to decode the… No, the data speaks of inflation, excluding two primaries; food and energy. The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in October on a seasonally adjusted basis, the same increase as in September, the U.S. Over the last 12 months, the all-items index increased 7.7 percent before seasonal adjustment. US CPI data for the month of October 2022 has been released by the Bureau of Labor Statistics.

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Core CPI excludes fresh food and energy prices which include rice, flour, cereal products, vegetables, fruits, electricity charges, cooking gas, and gasoline. The consumer price index reading on Thursday is the key event for investors this week, though analysts warned that an above-forecast https://1investing.in/ reading would deal a hefty blow to confidence on trading floors. The vaccine race is key to the reopening of economies and news on this front will remain in focus. The forward-looking PMI indicator also gives reason for hope that economies are coping better than expected with new lockdowns.

Calculating inflation-adjusted returns is extremely important because it tells the real value of an investment and if the money has grown in real terms or not. Say your investment gave you 3% returns per annum over a period of time and the value of money, which is inflation, also rose 3.5%; net-net your investment’s returns get nullified. The fall in inflation indicates that the worst inflation bout in four decades is gradually waning. Although, the Fed doesn’t expect inflation to slow enough to get close to its 2 per cent target until the year 2024.

This increase of 1.2 per cent is itself the highest month-to-month jump since 2005. The expectation was that the core inflation would relax to 6.5% and headline inflation will moderate to 7.9%. The fight to keep inflation in check is still ongoing, and the US Fed still has work to do. Federal Reserve has been tightening the monetary policy for the past few months to card down inflation.

Because sustained relative price movements result from shifts in the relative demand for goods or changes in supply, not from monetary policy, core inflation should exclude relative prices changes. Defined in this way, core inflation is the measure over which monetary policy has the most influence [Roger ; Shiratsuka ]. Thus, it is argued that central banks ought to target a price index whose rate of increase corresponds to the inflation that generates the costs that central banks are seeking to avoid by focusing on an inflation control objective [Wynne ].

Premier Li Keqiang has said Beijing will focus instead on consolidating the recovery. A strong reading could spark a fresh jump in yields and be bad news for stocks after the S&P climbed to fresh record highs, especially high-flying growth names. After rising by 8.3 per cent in August, the total CPI grew by 8.2 per cent in September compared to the prior month. However, costs for housing, healthcare, food, and other things have continued to rise, raising the risk of prolonged high inflation.

If the CPI drops, that means there is deflation, or a steady reduction in the prices of goods and services. The CPI monitors retail prices at a certain level for a particular commodity; price movement of goods and services at rural, urban and all-India levels. The change in the price index over a period of time is referred to as CPI-based inflation, or retail inflation. To measure inflation, we estimate how much CPI has increased in terms of percentage change over the same period the previous year. The Central Bank pays very close attention to this figure in its role of maintaining price stability in the economy.

Fed policy makers have already signaled a second 75 basis-point hike in interest rates later this month amid persistent inflation as well as still-robust job and wage growth. Even before the data were released, traders had already fully priced in a three-quarter percentage-point hike for July. Simply put, CPI specifically identifies periods of deflation or inflation for consumers in their day-to-day living expenses.