The umpteenth flare-up of US inflation confirmed by the publication of the consumer price index yesterday has reinforced the speculation of traders on a rate hike by the Fed earlier than expected.
Fed funds futures are now betting with a higher probability on a first monetary tightening in July 2022.
So commented on the new flare-up of US inflation Ryan Detrick, chief market strategist of LPL Financial, according to what was reported by the CNBC:
“Inflation remains stubbornly high, to the surprise of many, who predicted a drop in prices sooner than it is. The truth is, you can’t shut down a $ 20 trillion economy and not feel any shock when it reopens. the hope is that the problems that hit the supply chains will be solved in the coming quarters and that inflation will slow down “.
In October, the US consumer price index jumped 6.2% year-on-year, to a record since 1990.
On a monthly basis, the index jumped + 0.9%, more than the + 0.6% rise expected by analyst consensus.
Core inflation, ie inflation without the more volatile components represented by energy and food prices, increased by 0.6%, compared to the estimated + 0.4% and after + 0.2% in September.
On an annual basis, core inflation advanced by 4.6%, compared to the + 4.3% expected, against + 4% in September.