Nathan Janzen, senior economist at Royal Bank of Canada, notes that the US core CPI inflation rose 2.4% year-over-year in August while the headline index increased 1.7% year-over-year.
“Core prices rose 0.3% month-over-month for a third straight month.”
“There is still little if any evidence that US inflation is at risk of coming unhinged on the upside. Nonetheless, the third straight 0.3% increase in price growth excluding food & energy products marks the longest such stretch since 1995 – and the year-over-year rate at 2.4% matches a cycle high.”
“US tariffs on a widening variety of goods imports from China may be filtering through to higher consumer prices, but do not explain all of the increase. Prices for services ex-energy products also increased 0.3% in each of the last three months. The US Fed pays more attention to the core PCE deflator, which has held under a 2% rate, but could presumably follow CPI prices higher in the near-term.”
“We continue to pencil in another two 25 basis point rate cuts from the Fed this year, the next being next week in September.”
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.