US: Focus on CPI inflation today – Wells Fargo

Analysts at Wells Fargo suggest that markets and FOMC members will closely be watching the September CPI release of US today.

Key Quotes

“After three months of lower-than-expected inflation readings, the CPI index came in higher than what markets forecasted in August. The September reading has significant monetary policy implications as the FOMC prepares to continue to raise rates. On a year-over-year basis, core inflation continues to look rather anemic. Ex-food and energy, prices were up 1.7 percent over the past 12 months. Following the August gain, however, the recent trend looks stronger; over the past three months, the core index has risen at a 1.9 percent annualized pace.”

“August’s strong gain should help alleviate concerns among Fed members that the slowdown in inflation that began in the spring is set to continue. A strong September print would further ease inflation worries and make a December rate hike more likely.”   

“Previous: 0.4%, Wells Fargo: 0.6%, Consensus: 0.6% (Month-over-Month)”