Chanticleer
Hot US inflation delivers three warnings
The surprising data will give investors plenty to think about. But fading rate cut hopes will also have ramifications for politicians facing the ballot box.
The bizarre claim from Federal Reserve chairman Jerome Powell that US financial conditions are tight looks even sillier after Wednesday night’s hot, hot, hot US inflation data.
With core inflation (excluding food and energy) coming in at 3.8 per cent (above consensus for 3.7 per cent) and now running at an annualised rate of 4.5 per cent over the past three months, the six Fed rate cuts the market had pencilled in at the start of the year have gone up in smoke. Even the Fed’s own projection for three cuts now looks unlikely.
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