A lacklustre CPI print from the US came out in line with expectations, failing to astonish markets once again.
The print was thought to have been boosted by the rise in gasoline prices over the last month, along with the effects of hurricane season being all but dissipated. The figure however will need to show drastic upside over the next year to see a continuation of the Federal Reserves’ “normalisation path”, after the almost certain rate hike Yellen is expected to announce tonight. Multiple FOMC members have stated that their main concern for the US economy is the trajectory of inflation in the short to medium term. With figures being released inline or worse than consensus, one could say hawkish members of the Fed might see their ammunition run of out steam in 2018.

Balraj Sroya quoted in the Financial Times

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