US inflation data shows slower rise but fuels rate hike fears
Quick Look
US inflation data released overnight showed headline inflation rose 0.3% monthly and 3.4% annually, below expectations but still above target, sparking fears of another Federal Reserve rate hike as markets reacted with ASX 200 futures down 0.5% and crude oil prices continuing to rise.
AI-generated summary
Why It Matters
The Federal Reserve hiked interest rates in September for the first time in three years amid inflation fears. Inflation remains above target despite recent slowing.
Inflation figures released overnight from the US were less than expected, but still rose, sparking fears of another rate hike.
Headline inflation rose by 0.3 per cent for the month, bringing the rate to 3.4 per cent for the year to August. The core Personal Consumption Expenditure rose by 0.2 per cent for the month, bringing the annual rate to 3 per cent.
The figures were better than expected, with initial estimates putting headline inflation at the 3.7 per cent mark.
However, inflation still rose, causing fears that another US rate rise is just around the corner.
The US central bank hiked interest rates in September, for the first time in three years, amid inflation fears.
Nigel Green, CEO of deVere Group, said inflation was "still miles above target".
“We said after September’s hike it wouldn’t be the last one this year, and we’re sticking with that call.”
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The ASX is set to fall this morning, with ASX 200 futures down 48 points or 0.5 per cent to 8765.
Wall St was briefly buoyed off the back of US inflation data showing it was slowing more than expected in August, though the market closed slightly lower, reversing earlier gains.
Despite that, crude oil continues to rise, sparking continued inflation fears.
For now, grab a coffee and buckle up for the day ahead.
What to Watch
AI outlook — possibilities, not facts
The Federal Reserve may implement another interest rate hike before the end of the year.
Possible · Within months
Open Questions
- Will the Federal Reserve implement another rate hike before year-end?
- How long will inflation remain above the Federal Reserve's 2% target?
