FXStreet (Guatemala) - Analysts at Nomura explained that the strong gains in rental prices in the CPI point to a larger increase in core PCE inflation in September.
Key Quotes:
"Although core PCE inflation lost some momentum in July and August, the expected rebound in September could affect the near-term forecast for core inflation."
"Our forecast for core PCE prices in September implies an increase in the 3-month rate of core PCE inflation from 1.3% in August, to 1.5% in September."
"This may bolster the FOMC’s confidence in its outlook for inflation. In that sense, we think that today’s CPI, by itself, should raise, at least to some degree, the likelihood for liftoff in December."
"However, other incoming data suggest that economic activity is slowing. That seems likely to push the FOMC in the opposite direction."
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