Hey guys, it's sasha, the u.s consumer price index data for january has just come out and the all items inflation index has risen by 7.5 year on year. This is very significant and it was higher than the 7.3 percent. That seemed to be the consensus on the street, but i mentioned a few times that i felt the consensus was low, given what we were seeing with energy prices through january, the markets have naturally taken a dip, but so far the drop has not been as severe As some people perhaps anticipated, i know there's been a lot of people suggesting that maybe the market is going to begin completely collapsing once this happens, and so far it hasn't quite happened. The s p 500 is down 0.9, which indicates that a lot of this inflation fear has perhaps already been baked into the stock market correction that we saw through january.

Grace. Stocks are down a little bit more, but we're still not seeing anything particularly large. So far in pre-market, because over the last two to three months, we've seen very large drops on those growth stocks much larger than what we're seeing so far. Companies like tesla are only down around two percent, which is a lot but doesn't seem like that.

Much when inflation just went up not point five percent in one month to a level that we haven't seen in 40-yard whatever years and in this video i'm going to break down the cpi announcement from today, i'm going to share some insight and thoughts on what this Inflation data means and what the outlook from here looks like if you feel that the market is maybe approaching some kind of a bottom with inflation fees already baked in. Maybe we've already passed the bottom. This could be the last opportunity to go and buy the dip on an investing platform like lightyear, who are the sponsors of today's video lightyear is the only platform in the uk where you can buy us stocks completely for free. There are no fees at all and, unlike trading to onto a free trade, you don't have to pay foreign exchange fees for every transaction.

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Remember you need to use my link in the description to get that free 10 bonus. Overall, inflation rate for january 2022 was 7.5 percent, and so far the stock market hasn't reacted very well, but this is only pre-market trading and the day is young, so we may see a lot more movement in the coming hours. As expected, energy and food have had very high rises in january. Food and energy are both not 0.9 up just within the month and after already packing in big rises over the past few months.

But here is where it gets really quite ugly. All items increased by 0.6 in january, but if you look further down all items less food and energy there, the two culprits with high rises is also up 0.6 percent. So what we're beginning to see here are that other components of the cpi index that previously did not have big increases are suddenly beginning to grow, and this is a real concern. Commodities are up one percent - this is the fourth consecutive month of relatively large increases used.

Cars are continuing their ridiculous appreciation that we have seen over the past few months, but look down here. This is where it gets. Scary apparel is up. 1.1, medical care is at 0.9, 0.6 percent.

Transporters of one percent transport is reliant on energy, but this is the first time that we have seen that transpire into transport prices jumping up in recent months. This is really worrying, because items that previously stayed low have now started climbing, and that is a potential indicator that this inflation is really beginning to spiral, perhaps a little bit out of control, with wages being forced upwards and industries that were not previously touched by supply Chain issues and everything else suddenly raising prices to combat the wages, those prices leading to more inflation, that inflation leading to more wage increases. In fact, only two things seem to not be going up at the moment. New cars posted a very surprised, neutral growth, but new car sales have also been down considerably recently, so that maybe is a factor for why.

But the other one is shelter, which is a very very concerning metric, because this metric does not take into account actual real rent or mortgage prices into actual proper consideration. This metric is usually delayed from real price movements on how much it costs to actually live somewhere, because it is based on surveys and other indirect data sources, and every actual bit of data on rent prices in the us is indicating a very sharp recent increase in Prices, so inflation is continuing to run all the indicators are that it is not slowing down. It is not planning to slow down anytime soon. This is certainly what it looks like today.

If anything, all the indicators are that it is now beginning to accelerate, because there is no downward pressure from the fed taking action. I have mentioned before that energy prices are likely to cause pressure on inflation. Data for january, and oil prices were relatively low in december. Compared to october and november, but then they shot right up in january by about 10 percent.

The 10 does seem like a lot for a month-to-month increase, but it's really important to remember that inflation is a measure of the relative annual increase, so the real comparison is not to december. It is to january 2021, and in january 2021 oil prices actually went up. Also by roughly 10 compared to december 2020, so there are two conflicting factors here. On the one hand, the recent jump in oil price is similar to the same increase uh in the same period in percentage terms last year.

But it is also a much bigger jump in dollar terms in absolute terms, and that means that the dollar impact on the cost of lower priced goods will increase disproportionately because fuel becomes a disproportionately higher part of the overall cost of those products. So this is the case where the direct energy costs that comprise about a third of the total cpi index is not where the real impact of this high oil price will be seen at least not as much. The painful impact is hidden in the indirect numbers where energy costs are bait into everything else and in the first 10 days of february, oil has broken the 90 dollar mark. So next month's update for february numbers is likely to see even more pressure applied here.

Gas has also seen higher prices in january, and the price here is a lot more volatile, as the risk of the conflict in ukraine is hanging over russia's gas supplies to europe. We've seen a lot of fluctuation over the month and overall, the price is roughly 10 up compared to december as well, but with gas. The situation is a bit different to oil. In that gas prices in january 2021 were a little bit lower than in december 2020.

So that 10 jump that we saw last month actually had a relatively larger impact on the direct and indirect impact of the energy costs in that cpi index. The big problem we have at the moment is the outlook going forward. The us federal reserve is continuing its policy of waiting to see if inflation just goes away all by itself and seemingly not wanting to you know not wanting to move anything too much, not wanting to rock the boat. Its latest updates two weeks ago indicated no action is expected in february, with a small rate increase expected at the end of march.

Inflation is already running rampant and energy prices in february have so far stayed at very high levels and we're hearing more and more anecdotal data about the real term inflation being considerably higher than the official figures in the last month. There has been much more news coverage press releases, various bits of news and information where wages are beginning to increase because of this rise of inflation, and that is very dangerous, because that is exactly how the inflation spiral can get out of control. And we have already seen the uk government and other governments around the world beginning to increase their rates in the uk. We've already had two increases since december, with rates going up to 0.5 so far and they're expecting them to continue going up, because the official expectations are that inflation is going to begin rising very sharply over the next few months.

All of these factors are likely to put more pressure on the u.s fed to act, even if increasing rates in the us could lead to other negative outcomes due to the money printing. That's been going on over the last two years, so the fed is really stuck between a rock and a hard place, and the rhetoric that the whole of last year of inflation being transitory, has really backed them into a corner. That is actually becoming much harder to get out of then again, raising rates in november would probably have been met with a lot of negativity as well, because that's when omikron came onto the scene and i'm not sure that they could have done anything else, i'm not Sure what they could have really done to appease the masses at that point, maybe they should have started earlier well, i guess they could have maybe not printed the ridiculous amount of money in the first place, but that is a bit late. That train has very much left the station.

I hope you find this video useful. If you did, please don't forget to smash the like button for the youtube algorithm. Thank you so much for watching. I really really appreciate it and, as always i'll see you guys later,.