US Consumer Prices Rise in September
In September, US consumer prices rose by 0.2% from August, excluding energy and food by 0.3%. This slight increase, a tenth more than expected, is a crucial indicator of the economy’s health and future monetary policy decisions.
Analysis of the Data:
- The data suggest that further interest rate cuts by the Federal Reserve at its next meeting in November are likely.
- The significant 50 basis points cut in September is expected to be an exception, according to Commerzbank’s analysts Dr. Christoph Balz and Bernd Weidensteiner.
Stalling of Inflation Decline
The decline in inflation seems to have stalled, with the consumer price index surprising with a strong rise in the core rate for the second month in a row.
Key Points:
- The better-than-expected labor market data for September have removed the basis for speculation about a significant rate cut by the Fed.
- Optimism regarding easing price pressure may be tempered due to the recent data, calling for a cautious approach by the Fed.
- While a 25 basis point cut at the November meeting is still forecasted, market participants are uncertain about the outcome.
Impact on Monetary Policy:
The direction of service prices in the medium term will play a crucial role in shaping future monetary policy decisions by the Federal Reserve.
Overall, the data indicates a complex economic landscape that requires careful analysis and decision-making by policymakers to ensure stability and growth in the economy.