US Inflation Data Fuels Expectations of Rate Hike Next Week
Stocks in London and New York closed higher on Friday, despite US inflation data that may have solidified expectations of an interest rate hike next week from the Federal Reserve.
The FTSE 100 index rose 0.4% to 10,650.44, while the Dow Jones Industrial Average gained 1.0%. The S&P 500 and Nasdaq Composite added 1.1% and 1.3%, respectively.
US consumer price inflation was steady in August, with a year-over-year increase of 3.4%. This matches market consensus and is ahead of next week's Federal Reserve interest rate decision.
Analysts at Barclays believe the data supports a rate hike next week, while Oxford Economics' Bernard Yaros says it's not a certainty. Dutch bank ING sees a rate lift as a 'recalibration move', but not the start of a hiking cycle.