The markets are unaware of a warmer inflation report than expected and rather turn their attention to the last signs that the US labor market vacillates – a change in concentration which highlights a growing concern about a deeper economic slowdown.
Consumer prices have increased a little more than in August, according to IPC data published Thursday by the American Bureau of Labor Statistics. The rate of title of 2.9% and the central rate of 3.1% remain solidly higher than the target of 2% of the federal reserve. Normally, this would suggest that the American central bank should keep interest rate reductions.
But investors barely proclaimed the data and rather concentrated what is generally less following weekly weekly weekly complaints from the Ministry of Labor. The data has shown that complaints increased to 263,000 last week – the highest in almost four years and more than 236,000 in the previous week and 235,000 forecasts. This objective was reflected in bond yields, the 5 -year -old treasure yield has slipped five base points to less than 4% for the first time since the April rate that panic has châché the world’s stock markets.
Cryptographic markets initially plunged on faster than expected inflation data, but quickly rebounded while employment data took the stage. Bitcoin and ether (Eth) are only modestly higher, but the greatest action is in altcoins, suggesting the type of animal spirits that could be associated with monetary policy on the point of becoming much easier. Solara has increased by 11% of week to its highest level since January and Dogecoin 17% on a weekly basis. Xrp is ahead of 6.6% compared to last week and back above $ 3.
“The evidence of a slowdown in the United States now appears in difficult data; it is no longer just a question of surveys on feeling,” said Brian Coulton, chief economist.
As for the real economy, today’s figures offer a disturbing overview of something that the American central bank has worked hard to avoid: stagflation. This economic disease, defined by the simultaneous occurrence of high inflation and stagnant growth, is rare and difficult to repair. For decision-makers, it’s a wrestling.
Reduce interest rates to stimulate the risk of inflamed growth in inflation. But not to facilitate monetary policy while the job situation deteriorates is not a much better alternative.
For the moment, merchants are betting that the Fed will look into the protection of growth rather than eliminating inflation, with chances indicating a drop in rates next week as a quasi-certainty. Today’s data suggests, however, that balance becomes more difficult to manage and that the future way can be more complicated than the market.
“It will be a few months in advance because the impacts of the prices make their way through the economy,” said Heather Long, chief economist of the Navy Federal Credit Union. “Americans will suffer higher prices and (likely) No more layoffs.
