US inflation falls marginally, keeps aggressive Fed scenario in place

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US inflation falls marginally, keeps aggressive Fed scenario in place

On Thursday, US Labour Department data had unveiled that US Consumer Price Index (CPI), a weighted change in prices of consumer goods that the consumers have to pay in a given period of time, rose less than anticipated last month, as US inflation fell below a staggering 8 per cent mark for the first time in eight months.

On top of that, as the latest US inflation data had underscored a marginal decline in inflation on a monthly basis, investors remained spooked on whether to bet on a hawkish Fed as US Core CPI rose 6.3 per cent over past twelve months through September.

Besides, US Core CPI gained 0.3 per cent compared to a month earlier.

US CPI falls marginally, but fight against inflation is far from over

Nevertheless, according to US Labour Department data, US CPI roses by 0.4 per cent in October after rising by the same margin a month earlier, below an analysts’ forecast of an increase of 0.6 per cent.

On a year-on-year basis, US inflation rose by 7.7 per cent in October. However, the data underlined that a win for United States at its fight against inflation is a far cry, as petroleum prices rose sharply last month after three straight months of declines, while a choking rise in prices of households alongside rents accounted for more than a half of the increase in US CPI last month.

Besides, as latest US inflation data has been suggesting that a deflation process has been taking too long to coming into being, a chief economist at FWDBONDS in New York, Christopher Rupkey said, “Inflation is still too high, but there is evidence that the Fed has turned the corner in its fight and that the pace of future interest rate increases will begin to slow”.