US: Inflation firming, but Fed still has options – RBC

Nathan Janzen, senior economist at the Royal Bank of Canada, notes that the year-over-year, US headline inflation held at 1.7% while core inflation was held at 2.4%.

Key Quotes

“Core ex-food & energy CPI price inflation held at a 2.4% year-over-year rate in September – still above the Fed’s 2% inflation objective.”

“Energy prices have been weighing a touch on the headline rate, which remained at a lower 1.7% year-over-year growth pace in September. But lower gasoline prices are a positive for household purchasing power.”

“The Fed’s preferred core PCE deflator has been below core CPI this year, but growth in that measure has also ticked higher in recent months, rising to 1.8% in August.”

“Underlying inflation trends increasingly look to be converging around the Fed’s 2% objective.”

“Still, Fed policymakers have shown far more concern about the external growth backdrop, and the economic impact of escalating US-China trade tensions/tariffs, than current domestic conditions. The Fed remains highly likely to follow up 25 basis point rate cuts in July and September with another move lower in Q4.”

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

EUR/USD: Bulls need an upbeat German IFO Expectations figure

EUR/USD dips as lingering US-China tensions bode well for the US dollar. Technical indicators suggest scope for a re-test of the lower end of the multi-week trading range. Deeper losses may remain elusive if the German IFO numbers beat estimates. 


GBP/USD retraces three-day losses below 1.2200 on UK/US holiday

GBP/USD sellers catch a breather amid a lack of major catalysts on Spring Bank Holiday. UK PM Johnson gets criticized while favoring Adviser Dominic Cummings. US-China tussle intensifies with eyes on US President Trump’s reaction over the Hong Kong issue.


Is this the beginning of the end for Hong Kong's autonomy?

On Friday, the Chinese Communist Party unveiled details of a plan to impose national security laws on Hong Kong. The true colors of the authoritarian regime in China are at full display to the rest of the world.

Read more

Gold down by $6 in Asia, weekly chart shows bullish trend exhaustion

Gold, a safe-haven asset, is flashing red at press time even though the growth-linked currencies like the Aussie dollar are struggling to gain altitude. Technical charts indicate scope for deeper declines in the short-term.

Gold News

USD/JPY keeps mild gains above previous resistance line, 200-HMA

USD/JPY bounces off an immediate support line to print a three-day winning streak. Thursday’s high appears on the bulls’ radar as immediate resistance. 107.00 could lure the bears below 200-HMA.