NEW YORK, (Reuters) – U.S. consumer price surges in February resulted in an unprecedented annual rise of 40%. Inflation is expected to increase further as Russia’s aggression against Ukraine increases the prices for other commodities.

According to the Labor Department, 0.8% of consumers saw an increase in price after 0.6% was gained in January.

The CPI climbed 7.9% in the twelve months to February. This is the largest year-on-year rise since January 1982. It was the fifth consecutive month that CPI figures exceeded 6%. The CPI readings were consistent with the forecasts of Reuters polled economists.

MARKET REACTION:

STOCKS: S&P e-mini futures pared losses and were down 0.95%, pointing to a weak open on Wall Street

BONDS – Yields for benchmark 10-year notes rose to 1.9741%. The yield on two-year Treasury notes fell to 1.6963%

FOREX: The turned 0.033% higher

COMMENTS:

BRIAN INVESTMENT STRATEGIST SENIOR, ALLSPRING GLOBAL Investments, MENOMONEE FELS, WISCONSIN

“This inflation report might be just a prelude to an even uglier report when we get the March data. Prices of gasoline have increased 20% over the past month. The cost of food is rising. Food and energy prices have slowed down in February. But food and fuel will still keep inflation hot for at most another month. The Fed can’t bring peace to Ukraine and Russia, so there’s little that monetary policy can do to tame food and energy inflation. It may have to just say that it is serious about fighting inflation, but it is also seriously hamstrung in what it can do right now.”

PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK

“Bottom line is inflation is elevated and there’s more to come.”

“I was looking for inflation to peak in the second quarter but now that depends on oil. Perhaps we won’t see any relief until the end of the year.”

“Powell already told us we should expect a 25 basis point rate hike (this month). It should be 50 basis points or even 75 basis points but that won’t happen because of what’s happening in Ukraine right now.”

(Compliled by the global Finance & Markets Breaking News team)