US Inflation in January was a surprise to the upside notching 0.5% higher month-on-month, whilst annual inflation came in at 6.4%, higher than expected. Housing costs proved to be the biggest contributor to the latest CPI print. Furthermore, last month’s strong gain in the US job market shows how inflation risks becoming more entrenched, which has dashed any hopes from investors expecting a policy pivot in the near-term. Instead, the data suggests that the Federal Reserve will need to keep hiking interest rates into deeper territory and for longer to cool the economy down. The expectation of tighter monetary conditions led the S&P 500 to close relatively flat, whilst US Treasury yields climbed.