12 January 2023
If you are covering the latest US inflation data today, please find below a comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“Inflation in the US continues its downward trajectory coming in at 6.5% in December, a number that is likely to be positive for markets hoping that the Federal Reserve slows its rate hiking schedule. Indeed, this print should point to a 0.25 percentage point rise at the next meeting, rather than what has become the more common 0.5 percentage point hike. The rhetoric from the Fed will need to be watched closely, however.
“It has been keen to stress that it remains in hawkish mode while the labour market is tight and the economy can handle it – it will likely claim that the battle against inflation continues rather than declare victory. As such, markets will remain volatile as each data print and statement is analysed for what it might mean for interest rates. We are a long way yet from getting through this current inflation malaise, and with recessionary talk ever present, the next moves of the Fed remain uncertain.”
