US inflation has delivered another warning to the Fed.
🇺🇸 September CPI accelerated to 3.7% YoY, up from 3.4%, while monthly inflation reached 0.6%.
More importantly, underlying inflation came in hotter than expected:
📈 Core CPI: 2.6% YoY vs 2.5% expected
📈 Core CPI: 0.3% MoM vs 0.2% expected
The timing is uncomfortable. 🛢️ Brent is above $106 as tensions around Saudi Arabia and the Strait of Hormuz keep energy risks elevated.
For the Fed, the message is clear: inflation is proving sticky. An October hike is still not the base case, but markets now see a December increase as highly likely.
💵 Higher-for-longer rates favour the dollar.
📊 Stocks face pressure from tighter financial conditions.
🥇 Gold is caught between high rates and geopolitical safe-haven demand.
The market’s question is shifting from “Is inflation falling?” to “How much more tightening will the Fed need?”
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🔥 NordFX Expert View: US Inflation Heats Up Again was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.