US Dollar: CPI outcome to steer rate expectations – MUFG
MUFG’s Lee Hardman highlights that the stronger United States (US) Producer Price Index (PPI) data has reinforced expectations for a Federal Reserve (Fed) rate hike, with around 18 bps now priced for next week’s FOMC meeting.
MUFG's Lee Hardman emphasizes that the uptick in US Producer Price Index (PPI) data has bolstered expectations for a Federal Reserve (Fed) interest rate increase. Currently, 18 basis points (bps) of hikes are priced for next week's FOMC meeting, up from 13bps at the end of last week. The upcoming release of the US Consumer Price Index (CPI), particularly core CPI at a forecast of 0.2% month-over-month, is crucial for US rate predictions, the Dollar, and US Treasuries.
The sell-off in global bond markets was fueled by the stronger-than-expected US PPI report for August, which further supports the case for the Fed to begin raising rates next week.
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