US: Stable inflation gives the Fed flexibility to respond to trade risks - RBC

Josh Nye, senior economist at the Royal Bank of Canada, notes that the both headline and core CPI of the US rose 0.1% in May. Key Quotes “Headline inf  |  12/06/2019 14:12

Josh Nye, senior economist at the Royal Bank of Canada, notes that the both headline and core CPI of the US rose 0.1% in May.

Key Quotes

“Headline inflation slowed to 1.8% year-over-year and core dipped to 2.0%; both were a tick below consensus.”

“Core CPI inflation has been within 0.4 ppts of the 2% mark since 2011. The PCE deflator, the Fed’s preferred price measure, has been a few ticks lower on average and stood at 1.6% in April.”

“Today’s inflation report keeps the Fed’s options open. With the US economy showing few signs of inflationary pressure (at least from a consumer price standpoint), the central bank has leeway to respond to any slowdown in growth caused by tariffs and trade policy uncertainty.”

“Further escalation of the US-China trade dispute would increase the likelihood of a pre-emptive move from the Fed. Markets don’t appear to have high hopes for a potential Trump-Xi meeting, fully discounting a rate cut at the Fed’s July meeting and pricing in another move by October.”

Share

Popular News

Show More Popular News

Market Insight's Views

Market Insight analyses will provide both fundamental and technical comprehensions on finance
and other asset classes for Market Insight viewers

Back

Login to Market Insight Account

Your Market Insight account gives you access to the tools that we offer our customers including our
Technical Studies & Sentiment for your accounts.

Forgot Password?

Don't you have a Market Insight account? With a few easy steps you can easily register to Market Insight

Create a Market Insight's Account

Your Market Insight account gives you access to the tools that we offer our customers including our Technical Studies & Sentiment for your accounts.

register_ty

Thank you!

Welcome to Market Insight family!

You have succesfully completed the registration.
We will send you an e-mail to give you some
instructions and our Terms and Conditions!
Our account representatives will be contacting you as
soon as possible. If you have any further questions
please do not hesitate to mail us via info@marketinsight.com