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U.S. economic figures just published show inflation is at 8.2%, a tenth of a percent higher than expected, but down from 8.3% last month.
The key consumer report, which will inform The Federal Reserve (the Fed) future policy including interest rates, shows that inflation is slowing, but more slowly than hoped for.
That in turn may mean further interest rate hikes from the central bank in the very near future.
PPI Data Suggests Inflation Remains High
Data from the Producer Price Index (PPI) was published yesterday showed that the rate of PPI inflation was at 8.5% through Sept., rising 0.4% from Aug. after two months of decline.
According to Gabriel Santos of JPMorgan Asset Management, the marginal increase demonstrated that the economy is still in the early days of its inflationary deceleration.
“I think the data this morning just emphasizes that we’re still seeing the early days of a deceleration process in inflation with very mixed news,” she said on CNBC on Wednesday.
Adding, “There is some good news. There is some deceleration in goods prices, some improvement in supply chain issues, mixed news around commodities, more recently with a slight rise in energy prices once again, and then some still bad news in inflationary pressures in services… so we’re still very much in the early days.”
An Unsatisfactory Guessing Game
While the PPI may offer some clues, some commentators believe that everyone, including the Fed, is in the dark about what the CPI numbers may hold.
On the same program, Stephanie Link, Chief Investment Strategist for Hightower, said: “They [the Fed] don’t have much credibility. They were behind the curve. They should have been raising rates a year ago.”
As Link sees it “we’re kind of peakish” indicating that the top may have been reached but that ultimately the economy is still at “huge, huge levels” of inflation.
More updates follow.