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This year, on Valentine’s Day, markets are having a date with Inflation and it could go bad. Planet Earth’s biggest economy the United States will be releasing its Consumer Price Index data on Wednesday, 14th February and it might turn out to be an important turning point for the equity markets.
For most of last year, US Core CPI (which excludes food and energy) has hovered in the 1.7%-1.8% range. If the data comes at 2% or higher, it could reignite fears of inflation rising at a faster than expected pace and this could trigger another wave of a market correction. Reason being, higher inflation will be causing faster rate hikes from US Fed which will raise the cost for companies. On the contrary, if inflation comes lower at 1.7% or less, there could be a relief rally in the markets.
Looks like this Valentine, markets are on the hot seat.
