-
US inflation data for September suggest the United States Federal Reserve won’t be cutting rates any time soon, according to ANZ’s Head of G3 Economics Brian Martin.
Official data showed the headline consumer price index rose 0.4 per cent in September, down from growth of 0.6 per cent a month earlier. Annual inflation growth was unchanged at 3.7 per cent.
Supercore inflation (which focusses on services excluding shelter) grew 0.6 per cent.
Speaking on the 5 in 5 with ANZ podcast, Martin said the supercore numbers suggest it’s “going to take a while really for inflation to come back down”.
The Fed’s thinking is therefore likely to be, “we mightn’t want to raise interest rates, but we’re certainly not going to be cutting any time soon”, he said. “[That] fits with the higher-for-longer [rates] story.”
With bond yields remaining high, Martin said, the Fed may feel part of the economic-management job is already being done for them.
A new way to keep up to date
5 in 5 with ANZ is a new daily financial markets podcast featuring the latest news, trends and insights from ANZ economists based around the world.
Hosted by New Zealand-based journalist Bernard Hickey, 5 in 5 with ANZ explores five market trends, insights, and data releases, followed by a bonus deep dive on one specific topic, aimed to arm listeners with the information they need to start the day.
ANZ’s International network spanning 13 Asian markets, the UK and Europe, the US, New Zealand, the Pacific, the Middle East and Australia, provides a unique opportunity to connect listeners with insights from specialists on-the-ground. It features the voices of ANZ’s team of economists as well as foreign exchange, rates and commodities experts.
Episodes drop weekdays at about 6am (Australian Eastern Standard Time) and you can find them on Apple, Spotify, Substack and more.
Listen to 5 in 5 with ANZ to equip you with the five things you need to know before you start your day.
You can click here to find out more and listen to the latest episode.
The US data comes after officials from the European Central Bank (ECB) kept rates steady because inflation in Europe is not as strong or rapid as it is in the United States.
“Europe hasn’t had the buoyancy in its economy that the United States has,” Martin said.
“Growth has come down and that has meant the intensity of inflation pressures, that excess demand in the economy that we see still in aspects of the US, just isn’t there in Europe.
“I think the European inflation picture can therefore come down sustainably quicker than it can do in the United States.”
Share
 |
Receive insights direct to your inbox |
Related articles
-
Growth in the second half of 2023 won’t match that seen in the first, but a modest pick-up is on the cards in the medium term.
2023-09-28 00:00 -
ANZ’s chief economist explains the key things he is taking away from his recent visit to India.
2023-10-03 00:00 -
Population and trade growth have given Queensland extra economic support – but there's policy action required to keep the good times rolling.
2023-09-26 00:00
This publication is published by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (“ANZBGL”) in Australia. This publication is intended as thought-leadership material. It is not published with the intention of providing any direct or indirect recommendations relating to any financial product, asset class or trading strategy. The information in this publication is not intended to influence any person to make a decision in relation to a financial product or class of financial products. It is general in nature and does not take account of the circumstances of any individual or class of individuals. Nothing in this publication constitutes a recommendation, solicitation or offer by ANZBGL or its branches or subsidiaries (collectively “ANZ”) to you to acquire a product or service, or an offer by ANZ to provide you with other products or services. All information contained in this publication is based on information available at the time of publication. While this publication has been prepared in good faith, no representation, warranty, assurance or undertaking is or will be made, and no responsibility or liability is or will be accepted by ANZ in relation to the accuracy or completeness of this publication or the use of information contained in this publication. ANZ does not provide any financial, investment, legal or taxation advice in connection with this publication.