Why I've sold all my BRN... and all my other Stocks, page-1107

No doubt will be a reaction, always is, but we'll see how sustained. Bit of work still to be done.

Interesting comments re looking at the data in light of the food and energy prices currently shows an annual rate of 5.9 and that markets shrugged.

NEW YORK, July 13 (Reuters) - U.S. stocks closed modestly lower on Wednesday after investors digested hotter-than-expected U.S. inflation data, which fueled fears that the Federal Reserve could raise key interest rates by as much as 100 basis points later this month.

While all three major U.S. equity indexes bounced off lows reached early in the day, and occasionally edged into positive territory throughout the session, they were all red by the closing bell.

Year-on-year consumer price growth accelerated to a scorching 9.1%, the hottest reading since November 1981, driven by an 11.2% monthly spike in gasoline prices. read more

Stripping away volatile food and energy prices, which have abated since the report's survey period, core CPI cooled down to an annual rate of 5.9%.

"You would expect the CPI (report) that we saw would be a big risk-off event, but the market has shrugged," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "(Investors) were already expecting a very hawkish Fed and I don't think this affects much except uncertainty and that has something to do with why markets aren't selling off today."

The report raised odds that the Federal Reserve will raise interest rates even more than the 75 basis points previously expected. Traders of futures tied to the Fed funds target rate have now priced in the probability of a larger, 100 basis point, hike at the conclusion of its policy meeting later this month. read more

"If the Fed looks past the headline number, they'll see commodity prices have already begun to soften a bit" since the CPI survey period, Mayfield said, adding that a 100-basis-point rate hike based on the June CPI report could put central bank policy "behind the curve."

As seen in the graphic below, core CPI appears to confirm that inflation continues to ease from the March peak, but still has a long way to go before approaching the central bank's average annual 2% inflation target:

The question over whether the Fed's policy tightening could rein in inflation without tipping the economy into recession appears to be shifting to how severe the downturn is likely to be