August CPI may support a September FOMC rate hike, but not decisively, says Oxford Economics' Jaros
MacroDigital Finance
Bernard Jaros, chief economist at Oxford Economics, said the Federal Reserve's rate decision is in a very difficult position. The August consumer price index supports a rate hike at next week's Federal Open Market Committee meeting, but it is not yet a guarantee, he said. That is because core personal consumption expenditures, the inflation gauge the Fed watches most closely, are expected to be milder. He noted that the upside in the core index was pronounced in core services excluding housing, especially transportation services, underscoring that higher energy prices are being passed through to a broader range of consumer prices. On the other hand, core goods inflation has eased in some areas, and the impact of tariffs is expected to continue fading. He said housing costs remain moderate, and taking into account rising rental vacancy rates, a near-term acceleration in housing cost increases is unlikely.
