US: Core CPI inflation rose 2.4% in August – RBC
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.
Key Quotes
“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.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
