This week’s US inflation data will test the markets’ confidence that US inflation is still tracking towards the point where the Federal Reserve Board can start cutting US interest rates later this year.
This week’s US inflation data will test the markets’ confidence that US inflation is still tracking towards the point where the Federal Reserve Board can start cutting US interest rates later this year.and sent share prices tumbling and bond yields spiking when both the headline and “core” numbers came in above expectations.
Tuesday’s data for February has therefore taken on greater significance for markets, the sharemarket in particular, that have long built in an assumption that the Fed will begin reducing rates this year. The Fed is acutely aware that any rate cut ahead of the election in early November is inevitably going to attract a ferocious attack from Donald Trump.Forecasts of the headline inflation rate for February is for a 0.4 per cent increase over January and 3.1 per cent year-on-year. Core inflation – excluding volatile food and energy prices – is forecast to be 0.3 per cent for the month and 3.7 per cent on an annualised basi
US Inflation Markets Federal Reserve Board Interest Rates Share Prices Bond Yields Rate Cut Election Donald Trump February Data Headline Inflation Core Inflation