“What is more worrying is that the rise in core prices seems to suggest that inflation is likely to be much stronger in the coming months than markets had originally expectedwhich increases the risk that the Federal Reserve will not only be much more aggressive in raising rates, but keep them higher for much longer“, they added.
the CPI stood at 8.3% in interannual rate in August, compared to 8.5% registered in July. The data remained above the 8.1% expected by consensus.
With regard to core inflation, which excludes energy and unprocessed food, it stood at 6.3% in August at the interannual rate, worsening the figure for July (5.9%) and the consensus forecasts, who anticipated a rise to 6.1%. The monthly rate has risen twice as expected, to 0.6%, from 0.3% in the previous month and what was anticipated by the consensus.
Analysts had been warning that the core CPI would rise while the headline rate moderated. “There is a risk that the underlying rate, the trend rate, rises”, they highlighted from Bankinter before knowing the reference, while expected a smaller increase, up to 6.1%.
“(The increase in the underlying rate) would reinforce the apparently unshakable ‘hawkish’ or hard approach that Powell has been transmitting since Jackson Hole and that most advisers with specific weight, such as Brainard or Bullard, support”, commented these analysts. This “It will not help at all some stock markets that want to rebound, but cannot find reliable arguments”they added in Bolsamanía.
Today, the first market survey anticipates a 34% chance that the Fed will raise the rate by 100 basis points next Wednesday, increasing from 18% yesterday.
Source: Ambito
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