[INFINOX UPDATE] US Core CPI drops more than expected, USD slips lower Date: 14/09/2021

US CPI beginning to retreat

The Fed has been suggesting that the spike in US inflation would be transitory and begin to normalize in the latter months of 2021. Whilst it is still too early to determine how quickly inflation will unwind, US inflation seems to have peaked, with the normalization process underway. How quickly the process takes, is still too early to say.

Headline US CPI fell from 5.4% in July to 5.3% in August. This also came with the lowest month on month increase since the +0.3% increase in January 2021. The year on year reading of +5.3% was in line with the 5.3% forecast. However, the decline in the core US CPI has been the attention grabber for traders. Core CPI fell back to +4.0% in August (from +4.3% in July) and was less than the +4.2