US Dollar: August inflation key to September Fed decision - Commerzbank
Antje Praefcke at Commerzbank highlights that markets now price nearly a 70% chance of a September Fed hike after Chair Kevin Warsh’s hawkish speech, but stresses upcoming US inflation data will be decisive.
Commerzbank's Antje Praefcke indicates that markets anticipate a 70% chance of the September Fed rate hike following Chair Kevin Warsh's hawkish speech. However, she emphasizes that the upcoming US inflation data will be the deciding factor. Praefcke does not consider the jobs report as crucial, questioning how long the dollar can benefit from a potential rate hike amid renewed political risks.
The focus is on the August inflation figures, which will be released next Friday, as prices rose only moderately in July, potentially justifying the Fed's decision to hold rates. If August inflation turns out to be higher than expected due to increased energy prices, the Fed may feel compelled to raise rates, but it remains uncertain whether the dollar will sustain its advantage if this happens.
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