Stubborn US core inflation a risk to further cuts – London Business News | Londonlovesbusiness.com

Annual inflation rose to 2.6%, from 2.4% in September and the US MoM inflation held steady at 0.2% in October.

Annual core inflation (excl. energy and food) rose by 3.3% in October, in line with September’s reading.

US MoM core inflation also held steady at 0.3% for October, in line with expectations (Trading Economics).

Isaac Stell, Investment Manager at Wealth Club said, “Annual US inflation increased for the first time in seven months to 2.6% in October, with US core inflation also remaining stubbornly firm at 0.3% for the third month in a row. The latest figures underscore the difficult path the Federal Reserve continues to tread as they work towards their target.

With two consecutive cuts already in the books, this latest data will cast doubt on the Fed’s ability to go for a third. Stubbornness in the core rate will be a particular cause for concern.

A strong economy and a new US president whose policies are likely to be inflationary will mean a prudent, wait and see approach could be the favoured option for the Fed. They will not want to undo the hard work of the past two and a half years and risk letting inflation rear its ugly head once again.”