January consumer inflation expected to rise by 7.2%, the highest since 1982

Economists are expecting another hot inflation report, with the headline consumer price index running at a 7.2% pace in January.

CPI is reported Thursday at 8:30 a.m. ET and is expected to show an increase of 0.4%, a slower monthly increase than December, which had a revised headline gain of 0.6%. The year-over-year forecast of 7.2% is the highest since 1982 and is up from 7% in December.

Core inflation, excluding food and energy, is expected to rise 0.4% in January or 5.9% year-over-year, according to Dow Jones. That compares to a monthly increase of 0.6% in December and a year-over-year pace of 5.5% in the final month of last year.

CPI is key for the markets since inflation is seen as a direct trigger for the Federal Reserve’s interest rate hikes, and economists are basing their forecasts for the central bank on how much they think inflation will slow from its rapid pace. The Fed has made clear it will fight inflation, and it is widely expected to raise interest rates multiple times this year, starting with a quarter-point hike in March.