U.S. Outlook: Core inflation holds firm in the third quarter
In your heart you know inflation is out there, no matter what the Federal Reserve says, right?
For more on this and other economic developments this week, see my full report. Highlights are outlined below, followed by a link to the full U.S. Outlook report, delivered on Oct 16.Key observations:
- Despite economic growth headwinds and slowing of job growth in recent months, the core inflation outlook remains relatively stable.
- Anecdotal evidence in the Fed’s Beige Book for October suggests the labor market is already tight in many Fed Districts.
- As global growth stabilizes next year, the most likely path for consumer inflation is higher, not lower, in 2016.
- The worst deflation pressure may already be behind us, so the Fed shouldn’t tarry too long on raising interest rates.