September rate hike pause room widens after US CPI, says BMO economist
Macro
BMO's chief US economist Scott Anderson said July's US consumer price index came in broadly as expected, and with price pressures easing for a second straight month, the Federal Open Market Committee now has more room to hold policy rates steady at its September meeting. The year-over-year CPI inflation rate slowed to 3.4 percent from 3.5 percent in June, down from the May peak of 4.2 percent. Core CPI also cooled to 2.5 percent from 2.6 percent in June and the May peak of 2.9 percent. Services prices excluding energy rose just 0.2 percent month-over-month in July, but he noted the Fed would need further evidence of slowing core services inflation before completely ruling out a rate hike.
