US CPI Carried No Reason For Fed To Get More Aggressive – CIBC


The US reported a core inflation rate of 0.2% m/m and 1.8% y/y, exactly as expected and not really exciting. What does this mean for the Fed and the US Dollar?

Here is their view, courtesy of eFXnews:

CIBC Research discusses the reaction to today’s US CPI data for the month of February.

“You can take a quick look at the US CPI numbers, and only a quick look, because this month had no surprises for the market to chew on. Both headline and core prices rose an on-trend 0.2% in February, with the 2.2% headline rate for the last 12 months, and the 1.8% core, both matching consensus.

Tame core goods prices (only 0.1% this month, and -0.5% yr/yr) continue to keep inflation at bay, a reflection of the remaining global economic slack offsetting a tightening US economy. Next month’s CPI is likely to generate a few more headlines, as a big drop in cell phone fees from the prior year drops out of the 12 month rate.

Still, with core PCE prices still comfortably below target, the Fed has no reason to get any more aggressive on rate hikes than its current dot plot forecast already builds in,” CIBC argues.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.