World Economy

US Rate Hike in September

US Rate Hike  in SeptemberUS Rate Hike  in September

Inflation in the US continued its gradual rebound in July, clearing a path to a September interest rate increase by the federal reserve and leaving open the potential for a fourth hike this calendar year in December, Financial Review reported. Headline inflation, as measured by the consumer price index, rose a modest 0.2% in July from June, up from 0.1% in June from May. Higher housing and food costs offset a decline in energy prices last month. The CPI was 2.9% year-over-year, unchanged from June; the fastest pace in more than six years. Core CPI–which excludes food and energy–was 0.2% higher last month from June, the same pace in both May and June. However, for rate hawks, that lifted the year-over-year increase to 2.4%, the largest 12-month increase since the period ending September 2008, according to the US Bureau of Labor Statistics. “We have learned to temper our expectations for inflation, but all of the pieces are in place for price growth to move higher,” TD Securities senior economist James Marple said in a note.


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