US CPI: Stronger core inflation supports Fed liftoff – Wells Fargo

By FXStreet FXStreet (Córdoba) – According to analysts from Wells Fargo, today report showed an increase in the core rate that supports Fed rate hike, “although recent weakness in commodity prices supports a shallow path of future rate increases”.

Key Quotes:

“Inflation measured by the Consumer Price Index (CPI) came in largely as expected in November. On net, prices in the economy were unchanged for the month as falling energy and food prices were offset by gains elsewhere. Another drop in oil pushed gasoline prices down 2.4 percent in November.”

“Despite weakness in food and energy, the core index shows that the trend in inflation continues to firm. Core CPI advanced 0.2 percent in November, on pace with recent months’ gains. The pronounced split between the path of core services and core goods inflation continues to illustrate the divergence between the strength in the domestic economy and items more closely tied to the global economy.”

“The further drop in oil prices this week indicates that energy will continue to be a drag on headline inflation in the near term. Fed officials have remained adamant about the transitory impact falling energy prices have on inflation, and we do not believe the most recent drop in …read more

Source:: FX Street