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September 15, 2021

Latest - Market Reactions Change After US Inflation Data Released!

 U.S. consumer prices annual slightly lower when compared to last July. However, the August inflation reading remained high in line with supply constraints and continued price increases in some sectors.


The Consumer Price Index (CPI) recorded a significant increase. In August the CPI data rose 0.3% month -on -month or 5.3% on an annual basis. This reading is slightly lower than last month which recorded increases of 0.4% and 5.4% per annum in August.


At the same time, the core CPI excluding food and energy showed a slight increase of 0.1% and fell short of the expectations of economists. The inflation data was released after cata producer prices jumped 8.3% year -on -year in August, marking the largest annual increase since records were first kept in November 2010.


Federal Reserve Chairman Jerome Powell has repeatedly stated that higher inflation will be temporary, noting that he expects the supply chain to return to normal.



Thus this inflation reading will be scrutinized and used as an indicator of the timeline of stimulus reduction by the Federal Reserve (Fed).


The US central bank will hold its policy meeting next week. The Wall Street Journal reported on Friday that Fed officials will likely seek approval to begin bond purchases in November.


The US dollar giant traded lower against most major currencies following the publication of US inflation data recently.


The dollar index, which measures the strength of the greenback, slipped slightly from its previous two -week high, trading around 92.392, a decline of 0.28%.


The U.S. stock futures market surged following the publication of inflation data showing consumer prices declining.