US: Inflation looks firmer, unlikely to preclude the Fed from raising rates – Wells Fargo

By FXStreet FXStreet (Córdoba) – Sam Bullard and Sarah House, economists from Wells Fargo, noted that price indicators show that inflation has not weakened in the US and it is not a factor precluding the Federal Reserve from raising interest rates.

Key Quotes:

“Inflation seems to be on slightly firmer ground since the Fed met in September. After another steep decline in July and August, commodity prices have generally been fairly stable. Prices for WTI oil have hovered near $45 per barrel, which should help push the monthly changes in inflation readings back into positive territory for October. In addition, the dollar, measured by the broad trade-weighted index, is back near the levels of late August.”

“While we anticipate the dollar will appreciate further over the coming year as the Fed begins to tighten policy well ahead of many other major centrals banks, the strengthening is expected to be more gradual than the roughly 13 percent move seen over the past 12 months.”

“Indeed, when looking at a broader range of core inflation measures, the PCE deflator is the only index to have slowed over the past year. The Dallas Fed’s Trimmed Mean PCE, which is adjusted to more closely track overall inflation …read more

Source:: FX Street