US: Inflation is taking a breather – TD Securities
|Analysts at TD Securities note that the US headline inflation surprised to the downside in September at 0.0% m/m (0.023% unrounded), keeping the annual rate unchanged at 1.7% y/y (TD and consensus: 1.8%).
Key Quotes
“At 0.1% m/m (0.132% unrounded), core inflation finally lost some steam in September following three consecutive 0.3% increases in Jun-Aug. Despite the softer-than-expected monthly print, core inflation remained at a still solid 2.4% y/y for September.”
“Looking into the details, weakness in the core segment was largely explained by a -0.3% drop in core goods prices, which registered its first decline in four months.”
“On the other hand, core services inflation remained firm on a monthly basis, rising 0.3% m/m.”
“Although inflation continues to be a factor in the Fed's reasoning behind recent rate cuts, we don't see this month's CPI reading changing the calculus for the Fed in the near-term. Core PCE inflation remains below-target and inflation expectations continue to hover below the historical levels associated with price stability. Weaker PPI and CPI inflation reports aren't likely to change that picture, in our view.”
“We continue to expect the Fed to deliver another rate cut at the end of the month, with global growth, manufacturing, and trade also remaining key concerns.”
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.