US inflation is expected to ease for a second straight month reflecting the decline in energy prices since American crude oil peaked around $US130 a barrel six months ago, but that is unlikely to deter the Federal Reserve from delivering another supersized rate increase next week.Consumer prices in the world’s largest economy are forecast to rise 8.
Economists widely concur that the US central bank will tighten by 0.75 of a percentage point in September because core inflation, which strips out volatile food and energy prices, is still projected to rise. This would indicate that price growth in the economy remains widespread. “Policymakers will welcome the decline in headline inflation as it will help to dispel the narrative that the Fed has lost control of inflation. However, for the policy outlook, energy-driven declines are likely to matter little going forward,” warned Julian Richers, economist at Morgan Stanley.Morgan Stanley forecasts the core measure increased 6.1 per cent year-on-year in August, up from the 5.9 per cent lift recorded in the previous month.
A rate rise for who benefit? The way the Fed prints People should stop paying their mortgages for a year and see what happens!
If necessary they can adjust the basket or the basket weightings to get official inflation / CPI to reduce.
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Source: FinancialReview - 🏆 2. / 90 Read more »