United States: Another look at the impact of tariffs on inflation
|In September, inflation rebounded slightly in the United States, the Eurozone and Japan, while remaining stable in the United Kingdom. In the United States, the inflationary impact of tariffs has so far been contained (see chart of the month). In the other countries, there are positive signs, as inflation expectations are stable at around 2% in the Eurozone, wage growth is moderating in the UK and producer prices are falling in Japan.
In the United States, CPI inflation rose slightly in September (from +0.1 pp to 3.0% y/y), driven by a rebound in the energy component (2.8% y/y; +2.6 pp m/m).
Core inflation, meanwhile, moderated (3.0% y/y; -0.1 pp m/m). Wages have continued to decelerate, and 1-year household inflation expectations have fallen sharply since May (from 6.6% to 4.6%), although 5-year expectations remain high on a historical basis. These developments, combined with the stabilisation of the price pressure index and the slowdown in producer prices (2.6% y/y, -0.5 pp m/m), support the scenario of continued rate cuts by the Fed.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.