Traders, investors and economists are all counting on Wednesday’s consumer-price index report to show a decline in the annual headline U.S. inflation rate for July. But there’s another figure buried in the consumer-price index data that has the propensity to jolt markets.
“The outlook for inflation remains the primary concern for investors,” Wilmington Trust Investment Advisors’ Chief Investment Officer Tony Roth and Chief Economist Luke Tilley wrote in an email on Tuesday. “Persistent inflation is weighing on sentiment for consumers and businesses, yet economic data remains quite mixed and concerns are elevated that aggressive Fed policy could push the U.S. into recession.
In the round-the-clock currency market, where the dollar remains sensitive to U.S. data surprises, “the market needs to decide whether slowing headline is more important than sticky and strong core,” said TD Securities strategists Oscar Munoz, Mazen Issa, and Gennadiy Goldberg.