US CPI records greater than expected increase

Market expectations for a near start for the US Federal Reserve to cut interest rates took a hit on Tuesday after US consumer price inflation readings came in higher than expected.

According to Reuters, a US Department of Labor report showed that the consumer price index rose 0.3% on a monthly basis in January, which is more than the 0.2% rise expected by economists polled by Reuters.

On an annual basis, the index rose 3.1%, compared to an increase of 2.9% that was expected.

Excluding the volatile food and energy components, the core reading rose 0.4% on a monthly basis in January, compared to an expected rise of 0.3%.

On an annual basis, the index rose 3.9%, versus a 3.7% increase expected.