US CPI data

Dollar bulls and FOMC hawks will welcome today’s figures, which erase the question mark that had been forming over their credibility and undermining the US outlook as a result of softer data. FOMC Minutes last week reminded markets that June remained a possibility for the first US rate hike just as the juggernaut of the world’s largest economy looked set to be derailed by a patch of softer data. The bigger picture is that growth and employment are where the Fed want them and inflation readings (core in particular) now create a pleasing trajectory that keeps their options open and the market guessing, just as Yellen likes it.

The message from today’s figures is clear: a rate hike is on the horizon.

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