0SAY.LSEimpact 4
August CPI rises 3.4% year-over-year as Fed weighs hawkish stance
US consumer prices rose 0.4% month-over-month and 3.4% year-over-year in August, according to the latest Consumer Price Index inflation report. DWS Group head of fixed income George Catrambone and RBC Capital Markets head of US economics Michael Reid discussed how Federal Reserve voting members may be reacting to the data ahead of next week's September FOMC meeting. Catrambone said officials including Lori Logan, Beth Hammock and Neil Kashkari have been warning of a reacceleration in inflation, and that the market appears to be pricing in a rate hike. He cautioned that equities sit about 3% off all-time highs and that a curve that has moved from roughly 3.50% and 3.95% to 4% and 5% could weigh on consumers, growth and eventually stocks. The discussion also flagged consumer stress signals including non-mortgage personal interest payments, normalized credit card delinquencies, credit utilization and a falling personal saving rate now below 3%.