Goldman Sachs economist Alexandra Wilson-Elizondo said on Sept. 11 that the latest CPI report was largely in line with expectations, a headline outcome that investors had wanted to see but one that also increased uncertainty around next week’s rate decision. She said the challenge is that the data did not fully capture some of the inflation pressure that has emerged recently, and that there is little evidence inflation is moving back to target in the short term.
Wilson-Elizondo also said the survey period for the report came before the latest rise in energy prices and before the broader commodity rally spread from energy into metals and agriculture. In her view, that means the inflation print released today does not rule out the possibility of stronger price pressure ahead. She added that the report keeps the Federal Reserve’s option to raise rates on the table without forcing immediate action, and said markets may now pay closer attention to Warsh’s communication, energy prices, labor market data, and what happens next rather than to today’s release itself.
According to BlockBeats, Goldman Sachs economist Alexandra Wilson-Elizondo said on Sept. 11 that the latest Consumer Price Index, or CPI, report was broadly in line with expectations. On the surface, she said, that was the outcome investors had hoped for. At the same time, it made next week’s interest-rate decision more uncertain.
She said the difficulty is that the data did not fully reflect some of the inflation pressure that has emerged recently, and that there is "almost no evidence" that inflation is returning to target in the short term.
Wilson-Elizondo added that the report’s survey period came before the latest round of gains in energy prices. It also came before the commodity rally spread beyond energy into metals and agriculture. For that reason, she said today’s inflation data does not remove the possibility of stronger price pressure ahead.
In her assessment, the report leaves the Federal Reserve with the option to raise rates, but does not force it to act. She said markets may now focus more on Warsh’s communication, energy prices, labor market data, and what comes next, rather than on the data released today.
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