Market remains bullish on rates cuts despite US inflation uptick

US CPI hit 3.4%

Markets remain bullish on the prospect of several cuts to interest rates from the Federal Reserve this year, despite US CPI coming in above expectations.

The headline figure came in at 3.4% for December, according to data from the Bureau of Labor Statistics, up from November's 3.1% and above economist predictions of 3.2%. Core inflation has continued to ease, dropping to 3.9%. Eurozone inflation rises to 2.9% Despite this, markets are still predicting the first cut to come from the Fed at its 20 March meeting, with a 61.9% probability, according to the CME FedWatch Tool. US ten-year treasury yields spiked at 4.07% on the news but have since ticked down to 4.04%. The dollar has risen against the pound, euro and yen on the news,...