US inflation is growing more than expected and is preventing a cut in the cost of American money. Consumer prices rose by 3.5% in March, against forecasts of +3.4%, they were betting on +3.4% and above the 3.2% of February. On a monthly basis, the increase was 0.4%, more than +0.3% of expectations. The core index, al […]
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US inflation is growing more than expected and is preventing a cut in the cost of American money. Consumer prices rose 3.5% in Marchagainst forecasts of +3.4% they were betting on +3.4% and above the 3.2% of February. On a monthly basis the increase was 0.4%, more than +0.3% of expectations. The core index, net of food and energy, recorded +3.8% on March 2023, also in this case above analysts’ expectations, and a +0.4% on a monthly basis. The markets reacted immediately to the release of the data and to more uncertain prospects for a reduction in rates by the Federal Reserve (and perhaps the ECB). Futures are negative, anticipating the opening of Wall Street.
Piazza Affari immediately flattened out on parity, London reduces increases, while Paris turns negative (-0.2%). They rear up vice versa government bond yields (since their price falls and the returns are calculated as a percentage of the value of the security, ed), with the ten-year BTP rising from the minimum of 3.68% to almost 3.8%.An interest rate cut by the Fed in June now seems definitively over with the inflation data. And even July is no longer taken for granted. Analysts are now betting on a maximum of two reductions in the cost of money in 2024 by a quarter of a point, for a total of 0.50%. The good data on the job market stars and stripes released last Friday are another element that may lead the central bank to stall on rates as there is no need to support employment.
