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Steady US September CPI leaves Fed freedom to end QE - ING

FXStreet (Łódź) - Rob Carnell from ING comments on the US CPI numbers released today and showing an unchanged reading of 1.7% in September, despite the bank's expectations of a decline.

Key quotes

"Gasoline prices, which fell by about $0.10 in September, registered only a 1.0% mom decline, as seasonal adjustments for this time of year are particularly hard, and the $0.20 decline in Gasoline prices we have seen so far in October, will likely have a much bigger impact next month."

"Also helping to throw our forecast off-track - food prices rose a reasonably chunky 0.3%mom, whilst medical care commodities bounced back 0.5% mom after their 0.1% mom decline in August, and rents – which underpin a reasonably positive underlying CPI story, resumed their upward trend in September (+0.3%mom) after taking a breather in August."

"Airline fares were down 0.5%mom, and we do expect to see cheaper energy prices having a bigger impact on these prices in the coming months."

"This CPI release only postpones the lower inflation environment that will follower lower oil prices, October should see more weakness in prices. But for the time being, it leaves the Fed more freedom to ignore James Bullard and end QE in October."

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