14 November 2023
If you are covering the latest US inflation statistics, please find below a comment from Lindsay James, investment strategist at Quilter Investors:
“Today’s inflation data in the US has offered a further signal that the Federal Reserve’s work on interest rates is probably done, even though official indications keep another rate rise this year on the table. Although core inflation is currently declining only slowly, there are increasing signs this will speed up in early 2024 amidst a softening economic backdrop, and so whilst central bankers seem keen to end all talk of future rate cuts, they are likely to be disappointed on this front. Managing the message around the path of interest rates may become trickier should the data appear to be more positive than expected.
“The release highlighted the impact of falling energy prices, something that will be mirrored across other advanced economies, with the energy component down 4.5% year-on-year in October and down 2.5% month on month. However shelter inflation, which constitutes one of the largest components of US CPI, remained stubbornly high, rising 0.3% month on month. As a result, the path back down to target is going to be a long and arduous one, and may just give the Fed enough cover to ignore the calls for rate cuts for now, no matter how noisy they get.”
