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US inflation rises 3.2% year-on-year

However, 90% of the increase was a result of housing costs which are heavily lagged.

10 August 2023

US CPI bucked the trend of the last 12 monthly data readings, which all consecutively fell, by rising 3.2% year-on-year. The bulk of the increase, which was mostly anticipated, was in housing costs which accounted for almost 90% of the increase. However, it is important to remember that this particular input is heavily lagged and in the real world has already turned down. So, all in all the direction of travel for US inflation remains lower in general and that will cheer the bulls that inflation is licked and rates have probably peaked. We do not expect another hike now next month but it is way too early to suggest that rates will start to come down imminently.

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Charles Hepworth

Investment Director
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