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MNI Inflation Insight-Sep 2021: CPI Soft But Hawks Biding Time

MNI Inflation Insight-Sep 2021

EXECUTIVE SUMMARY:

  • August's softer-than-expected US inflation data and the second consecutive M/M slowdown in core CPI since June is convincing enough evidence that the peak of pandemic-related inflationary pressures is in the past.
  • But likewise there is nascent evidence in the composition of August's inflation report to suggest that inflation is broadening out, with plenty of potential remaining for CPI readings to remain firm going into 2022.
  • While the report won't impact the Fed's tapering decision, at the margins it may bolster the case for FOMC participants not signaling pre-emptive rate hikes in the September dot plot forecasts.

PLEASE USE THE FOLLOWING LINK TO ACCESS FULL PDF ANALYSIS:

USInflationInsightSeptember2021.pdf

Source: BLS, MNI Calculations

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