US inflation data dashes expectations for imminent interest rate cut

The current annual consumer price growth in the U.S. exceeds market predictions, tempering expectations for an immediate Federal Reserve interest rate cut, based on recent data

The pace of annual consumer price inflation in the United States accelerated beyond market expectations, dampening hopes for an early interest rate cut by the Federal Reserve, as revealed in Thursday’s figures.

According to the Bureau of Labor Statistics, annual inflation rose to 3.4% in December, up from 3.1% in November, surpassing the economists’ expected 3.2%.

The annual core inflation, excluding food and energy, also exceeded forecasts at 3.9%, against the expected 3.8%, although it eased from November’s 4.0%.

On a monthly basis, consumer prices increased by 0.3% in December compared to November, following a 0.1% rise from October to November.

Core consumer prices also rose by 0.3% month-on-month in December, matching the growth pace seen in November.

Nigel Green of deVere Group contended that despite persistent inflation, there is insufficient evidence for the central bank to commence rate cuts, cautioning against the market’s exuberance in anticipating cuts in 2024.

Source: Newsroom