What Recession? Inflation Fears Surge as Retail Sales Jump 5.3%

There’s good news, and there’s bad news.

In the good news department, retail sales for the month of January exploded, jumping 5.3% – nearly 5 times the number economists had anticipated.

But, with that uptick in sales–comes an uptick in inflation. The producer price index (PPI), which measures the amount that producers pay for goods, came in far higher than expected with the Bureau of Labor Statistics reporting that the 1.3% jump was the highest on record for the index. (scroll down for more)

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The yield on the 10-year Treasury note jumped to 1.316%, though at 9:26am, have leveled off slightly at 1.287%. The yield on the 30-year note stands slightly above 2% at 2.051%.

Thanks to government stimulus checks, consumers boosted spending in January. $600 stimulus checks were sent to Americans in the early part of the month. The question now is — might it be too much? Is that economy at risk of seeing massive price inflation? Judging by the recent weakness in the dollar, along with asset inflation in equity prices and commodities — along, even, with bitcoin — questions remain as to whether the Fed can managed to help the economy mend while keeping inflation tame.

Minutes from the most recent Federal Reserve’s Open Market Committee meeting will be published at 2pm ET on Wednesday and may provide additional insight into the Fed’s consideration on interest rates.

 

 

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