The benchmark 10-year Treasury yield rose to a new 2.5-year high above 1.99%.

The published data will make it possible to raise rates in March by 50 basis points at once.

The consumer price index (CPI) in the US rose in January by 0.6% m/m, exceeding the forecasts (+0.4%). On an annualized basis, the figure increased by 7.5%, also exceeding expectations for growth of 7.3%.

The core consumer price index, excluding food and energy, also rose by 0.6% in January against the forecast of +0.4%. In annual terms, core inflation increased by 6%, exceeding forecasts (+5.9%).

The largest contribution to rising prices in January was made by the growth of food, electricity and housing indices, the US Bureau of Labor Statistics reported. The growth in the core consumer price index was mainly affected by rising prices for housing and used cars and trucks. However, the growth is broad-based, with virtually all components of the index showing gains over the past 12 months.

“Inflation is higher than expected and new signs of an inflationary trend taking hold could encourage dollar buying as the market price raises the possibility of a 50 basis point rate hike in March. And this promises to be bad news for the stock markets,” notes the GravityPlus analyst team.

UPDATE: After an initial bounce, the dollar turned lower along with the rise in stocks after the opening of trading in the US stock market.