US inflation falling, here’s how it will affect rate cuts and the race for the White House
In the United States inflation continued its downward spiral, setting the stage for a rate cut by the Federal Reserve at next week’s meeting. At 2.5% in August, the headline figure was marginally better than the 2.6% estimate and well below July’s 2.9%. Core inflation came in slightly firmer than expected, rising 0.3% month-over-month and 3.2% year-over-year, which could tip the balance toward a 50 basis point cut in September.
Attention now shifts to the Fedand with today’s inflation data, coupled with weak July payrolls, the central bank would be able to balance the economy out of a recession. Lower inflation, coupled with a rate cut, could also give the Democratic presidential candidate a boost.
*Chief Investment Officer of Moneyfarm
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