Although the Us inflation is on the downside, the dollar still fell ahead of the anticipated Jackson Hole. According to the recently released data, the Federal Reserve’s inflation measure, the Core PCE Price Index, missed expectations across the board and fell below the previous month’s levels.
This follows the earlier data released this month that showed US headline inflation falling in July from 9.1% to 8.5%, primarily due to a slowdown in energy costs, while core inflation remained steady at 5.9%, beating market expectations of 6.1%.
Today’s data may increase the growing feeling that inflation in the US, though extremely high, has topped and that the recent rate hikes by the Federal Reserve are impacting price pressures.
Though the Fed’s high and might not favor a more dovish monetary policy, the central bank has said that the future path of rate hikes is data-dependent, and today’s fall will have been noted.
The USD slipped post-release of the speech; however, more is expected in terms of further movement ahead of Fed chair Jerome Powell’s speech at 15:00 UK at the Jackson Hole symposium. The markets have been in a holding pattern this week, waiting for Powell’s words which are likely to reinforce that the Fed will keep on hiking rates until inflation is seen falling towards the target.