[vi] Hot CPI ‘far enough from consensus’ to put October Fed hike back in play – Natixis

[vi]

[vi] (Kitco News) – September’s higher-than-expected CPI report means that August’s above-trend data wasn’t just an outlier – and it puts an October rate hike right back on the table, according to Natixis.

[vi] “Inflation for September was hotter than anticipated and broad-based, which will stoke concerns that the lull in price pressures over the summer was just a blip,” economists Christopher Hodge and Selin Aker wrote in Natixis’ CPI Recap. “Recreation and education and communication commodities were both quite hot in September, leading core goods prices to rise 0.25% m/m, while higher rents and hotels pushed up shelter prices to 0.37%. The supercore index was softer than in August, coming in at 0.42%. Headline CPI rose 0.6% m/m on the back of energy prices, with gasoline rising 9.1% m/m (prev. 3.9%) accounting for over half of the monthly all items increase.”

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[vi] The economists said that they remained optimistic about the U.S. inflation trajectory, even after August’s disappointing print. “\[B\]ut that confidence admittedly takes a bit of a hit given the broad pressures in September,” they said. “We had said that anything near consensus would not likely shift the narrative for the Fed for October, but this is far enough from consensus to at least make it a debate. Fed Chair Kevin Warsh has said that he welcomes “live” meetings and it looks like that is what he will get in October.”

[vi] “We think avoiding a hike in October is prudent as it will allow time to further assess economic variables by the December meeting, as well as avoid the political fallout from hiking just before mid-term elections in early November,” Hodge and Aker wrote. “Ultimately, we think the Fed will pause when it meets in a few weeks, but today’s data at least gives the hawks more ammo and if markets continue to price in a hike, the FOMC may be loathe to surprise with a hold.”

[vi]

[vi] [Ernest Hoffman](/author/ernest-hoffman)

[vi] Ernest Hoffman is a Crypto and Market Reporter for Kitco News. He has over 15 years of experience as a writer, editor, broadcaster and producer for media, educational and cultural organizations. Ernest began working in market news in 2007, establishing the broadcast division of CEP News in Montreal, Canada, where he developed the fastest web-based audio news service in the world and produced economic news videos in partnership with MSN and the TMX. He has a Bachelor's degree Specialization in Journalism from Concordia University. You can reach Ernest at 1-514-670-1339.

[vi] https://www.linkedin.com//in/ernesthoffman/

[vi] Tags:

[vi] CPIcore CPIinflation expectationsFederal Reserve monetary policyFed rate hikeNatixis

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[vi] Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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