The Consumer Price Index surged to 6.8% in December, the highest level in nearly 40 years. Price increases were broad-based once again, and the CPI’s housing components were major contributing factors as we warned they would be in the latest issue of InvesTech Research. With the FOMC Meeting on deck next week, pressure is mounting on central bank officials to take steps to rein in inflation either by tapering their balance sheet faster and/or hiking interest rates sooner than they have previously communicated. If the Fed does take a more hawkish stance than the market is expecting at their upcoming meeting, then equities will likely face tougher sledding ahead.
