US Inflation Strengthens, Fed Wary
US inflation is heating up again after the latest CPI data showed price pressures remained higher than market expectations. The annual CPI rose to 3.8%, higher than the 3.7% expected and a sharp increase from the previous period's 3.3%. This data reinforces concerns that US inflation is not yet fully under control.
Inflationary pressures were also evident in the Core CPI m/m, which rose 0.4%, exceeding the 0.3% forecast and higher than the previous 0.2%. Meanwhile, the Core CPI m/m was recorded at 0.6%, in line with market expectations, but still indicating strong monthly price pressures, albeit lower than the previous period's 0.9%.
This hotter inflation data has the potential to strengthen the US dollar as markets believe the Fed still has reason to maintain high interest rates for longer. Expectations of an interest rate cut could be delayed again if core inflation continues to show pressure, particularly in the services sector and primary consumption needs.
For financial markets, this CPI release is a less favorable signal for risk assets. The US dollar has the potential to strengthen, US bond yields could rise, while gold and currency pairs like the EUR/USD are at risk of short-term pressure. However, US-Iran geopolitical tensions could still limit gold's decline as safe-haven demand remains strong. (CP)
Source: Newsmaker.id
