Market Quote: Fed Rate Cut Remains Likely After Latest Inflation Report
Author: The editor's desk
August 14, 2024
A mid-week analysis of what’s happening in global financial markets from the perspective of AGF’s investment management team.
Inflating Rate Expectations
Global equity markets pushed higher following the release Wednesday of a better-than-expected U.S. Consumer Price Index (CPI) for July. Headline CPI was up just 0.15% last month compared to the previous, while core CPI (excluding food & energy) jumped 0.17%. Both figures were slightly below consensus expectations of 0.2% month-over-month.
Compared to June’s reading, the biggest price declines in the U.S. were seen in used vehicles, apparel, medical care and airline fares, while shelter costs and vehicle insurance rose more than expected.
This continued disinflation trend combined with recent data showing labour market softness may keep the U.S Federal Reserve (Fed) on track for its first interest rate cut in September, but other important data still awaits investors before that decision, starting with today’s release of U.S. retail sales for July and the latest weekly jobless claims, both of which could provide more insight into the health of the U.S. consumer.
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