“No landing”Markets are still on edge after Tuesday’s hot inflation report, as Wall Street suddenly and sharply discounted the odds of imminent interest rate cuts.
It has also poured cold water on the belief among many investors that the U.S. economy will achieve a “soft landing.”Why so gloomy?
The Consumer Price Index report, which came in above economists’ forecasts, is a stark reminder of the challenges that the Fed faces in bringing down inflation to its 2 percent target.
Even after excluding volatile energy and food prices, inflation is holding roughly steady and is well above where the central bank feels comfortable.
Shelter costs, including rents, also rose above expectations, and “supercore inflation,” a measure the Fed closely follows that includes common “services” expenditures — like haircuts and lawyer fees — rose 4.3 year-on-year, its highest level since May, according to Deutsche Bank data.
Organizations:
Deutsche Bank
Locations:
U.S