J.P. Morgan: US inflation provides no relief for the Fed

J.P. Morgan: US inflation provides no relief for the Fed

July 18, 2022

Inflation United States Fed
Inflatie (04)

US inflation once again surpassed expectations in June, leaving the Federal Reserve (Fed) with little reason to start charting a less aggressive course of monetary tightening.

Both headline and core measures surprised meaningfully to the upside with the overall index rising by 9.1% year on year. Much of this has been caused by factors beyond the Fed's control - almost half of the headline figure is driven by increases in food and energy prices, in large part because of the war in Ukraine. But the inflation problem is broader than that, extending to services and shelter components that continue to firm. Investors are unlikely to hear more dovish tones from the Fed until inflation appears to be falling meaningfully. Until then, the hawkish rhetoric is likely to continue.

18072022 J.P. Morgan

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