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U.S. consumer prices climbed more than expected in January as inflation hit highs not seen since 1982. The Consumer Price Index (CPI) was up 7.5% year-over-year in January, versus up a 7.0% year-over-year gain in December. Core CPI (CPI less food and energy) was up 6.0% year-over-year in January, versus up 5.5% in December.

The January employment report surprised to the upside today with US nonfarm payroll growth of 467,000 in the month versus the consensus forecast which called for an increase of only 125,000 due to omicron concerns.

An investment theme for the Chandler team going into 2022 centered around markets being at an inflection point; given the adjustment higher in Treasury yields and the volatility in equity markets in January the theme looks to stay in place going forward. Although market prices have been adjusting to the elevated inflation readings for some time, the notable news of the past week was the Federal Reserve Chair Powell’s press conference after the conclusion of the January 25-26 Federal Open Market Committee (FOMC) meeting.