-
Lingering US inflation fears leave a final rate hike on the table
The August inflation data from the US shows headline CPI came in at 0.6% month-on-month with core (ex-food and energy) prices increasing 0.3% MoM as we suspected, but the market had been expecting 0.6% and 0.2%. This leaves the year-on-year rate at 3.7% for headline inflation (up from 3.2%) while annual core inflation slows to 4.3% from 4.7%. When measured to three decimal places, the 0.278% core print doesn’t look so bad. It is not a terrible miss, but markets will likely interpret it as showing the Fed can't completely relax, especially with the potential for higher energy costs to be passed through to other ... (full story)