CPI print broadly in line with forecasts, although core CPI rose
Just when everyone had assumed the Silicon Valley Bank collapse would push the Federal Reserve (Fed) into not raising rates next week, today’s US inflation print augurs for continued hawkishness. The CPI print came in broadly in line with forecasts with a year-on-year increase of 6.0%, although core CPI rose 0.5% over the month, slightly ahead of the 0.4% forecast, which will worry the Fed. While CPI continues the trend lower for the eighth consecutive month, it still is remarkably high by the Fed’s standards and continued hawkishness should still be warranted, or at least that is what the Fed will likely want to state. It puts the central bank in a tight spot – pouring interest rate fuel onto the supposedly “contained” banking fire might not be what investors want to see. Pausing a 25 bps hike next week only delays the inevitable though.
Important legal information
The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.