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US inflation: Final nail in the coffin for Fed – Swissquote

FXStreet (Delhi) – Arnaud Masset, Market Analyst at Swissquote, suggests that the yesterday’s US inflation report has put the final nail in the coffin for interest rate hike in September.

Key Quotes

“The uncertainty surrounding the timing of the first rate hike by the Federal Reserves in almost 10 years has held the market’s attention for the last few months.”

“However, one should remember that the Fed’s dual mandate is to promote maximum sustainable employment and price stability. One can reasonably say that the first mandate is fulfilled or at least that the job market is on the right track as unemployment rate fell to 5.1% in August.”

“However, according to last month CPI reports, inflation pressures remain subdued in the US. Yesterday, August headline CPI printed at 0.2%y/y or -0.1%m/m, matching median forecast. Core inflation remained stable at 0.1%m/m or 1.8%y/y, below market expectations of 1.9%y/y.”

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