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With the current crisis in financial conditions, what is the prognosis for inflation in the United States?

Here is their view, courtesy of eFXdata:

CIBC Research discusses its reaction to today’s US inflation report for the month of February.

If you still care about it, US inflation looked a touch firmer than expected in February, but clearly doesn’t stand in the way of further Fed rate cuts. The 0.1% gain in total CPI was still enough to have headline inflation ease two ticks on a year-on-year basis to 2.3%, while core prices, up 0.2% on the month, lifted the 12 month rate for that measure by a tick to 2.4%. Food prices were a bit firmer than we expected in the headline rate, while core was elevated by a modest gain in clothing (more typically a negative), with core services decelerating a bit from its prior trend (to a 0.2% gain in this month, but still up 3.1% yr/yr),” CIBC notes.

The market’s attention is, for obvious reasons, elsewhere these days,” CIBC adds.

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