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Another disappointing US inflation report

Essentially confirms another 75 bps hike at least at the Fed meeting next month

13 October 2022

Another very disappointing inflation report from the US today. Core CPI rose faster than forecast yet again, with a monthly gain in September of 0.6% against the 0.4% expected. This essentially confirms another 75 basis points (bps) hike at least at the Fed meeting next month. Rental costs, food costs and medical costs all contributed to the larger than expected inflation print and were it not for the huge ongoing draw from the US Strategic Petroleum Reserve that the Biden administration authorised, keeping gas prices artificially lower, this CPI monthly print would have been even more alarming. Bad news for Biden in the upcoming mid-term elections. Bad news for the Fed which will have to keep pumping out the hawkish messaging. Bad news for bonds and equities. Darkest before the dawn perhaps but this seemingly long night seems eternal.

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Charles Hepworth

Investment Director
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