US CPI: Core inflation settles down – Wells Fargo


Data released today showed that the Consumer Price Index (CPI) remained unchanged in September while the core index rose 0.1%. Analysts at Wells Fargo, point out that while the trend in inflation has firmed recently, it remains sufficiently tame for the Federal Reserve. 

Key Quotes: 

“Inflation eased up in September, with prices unchanged over the month. A 2.4% drop in gasoline prices held down the headline. We expect the drag to dissipate next month, following the jump in gas prices after outages at a major Saudi Arabian facility, and for gasoline to be a more neutral force in October as oil prices have come down more recently.”

“Although the core trend has firmed in recent months, inflation is still running below levels that are likely to threaten the FOMC’s easing bias. Committee members have heavily emphasized the symmetric nature of the inflation target. With the core PCE deflator running below the FOMC’s
2% target for all but 11 months of the 10+ year expansion and inflation expectations at the low end of historical ranges, concerns about inflation remain skewed toward it running too cool, not too hot. Moreover, the dimmer prospects for U.S. growth under the light of a weak global economy and the trade war are expected to weigh on inflation in the coming months and offset the temporary boost from tariffs.”

“The softer September print in core CPI weakens FOMC hawks’ case for holding off on further rate cuts as it shows inflation is not about to break meaningfully above the Fed’s target. We continue to look for the FOMC to cut rates again in the fourth quarter, most likely as early as this month, as
growth slows and significant downside risks to the outlook linger.”

 

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD nears 1.1100 ahead of the close

The EUR/USD pair is at daily lows after US and Chinese authorities confirmed phase one on a trade deal agreed. Some tariffs will be rolled back as China agreed on “massive purchases” of US goods, according to President Trump.

EUR/USD News

GBP/USD extends corrective decline to 1.3330 region

The GBP/USD pair continues shedding part of its post-UK election’s gains, although at levels last seen several months ago. Hopes that PM Johnson will pass his Brexit deal through Parliament will keep the Sterling on the winning side.

GBP/USD News

Financial Big Brother is coming, but Bitcoin will remain

Central banks move quickly looking to oversight all payments. Greece could impose sanctions if digital means are not used in at least 30% of payments. Once inside the crypto ecosystem, governments have little capacity for financial censorship.

Read more

Gold: Steadily climbs to session tops, upside seems limited

Gold extended the overnight rejection slide from 100-day SMA resistance and witnessed some follow-through selling during the Asian session on Friday.

Gold News

GBP/USD extends corrective decline to 1.3330 region

The GBP/USD pair continues shedding part of its post-UK election’s gains, although at levels last seen several months ago. Hopes that PM Johnson will pass his Brexit deal through Parliament will keep the Sterling on the winning side.

GBP/USD News

Forex MAJORS

Cryptocurrencies

Signatures