US Inflation Calm Eases Fed Hike Fears, Rate Hike Expectations Plummet
The US inflation calm has eased fears of a September Federal Reserve rate hike, reducing expectations from 60% to just over 32%. This shift is attributed to reassuring macroeconomic data, particularly a stable producer price index and a decline in retail sales.
Experts believe that despite inflation remaining high, it no longer justifies an immediate tightening. The stability of the PPI index, with no change recorded in July, and the collapse of expectations for a rate hike have pushed back the urgency of monetary policy action.
The burden of public debt and geopolitical tensions pose significant risks to the Fed's upcoming decisions. Washington's diplomatic firmness has sparked fears of an oil price rebound, while the US Treasury Secretary threatened Tehran with economic isolation, shattering hopes for a quick deal reopening the Strait of Hormuz.