ALBAWABA – Policymakers in the Eurozone and United States (US) are likely to take comfort this week from knowing that core Eurozone and US inflation is slowing, excluding food and energy, news agencies reported Saturday.
Core US inflation slipped below 4 percent in August for the first time in nearly two years, according to Bloomberg, and core Eurozone inflation slowed to a 12-month low in September, at 4.8 percent.
This is good news for Federal Reserve (Fed) and European Central Bank (ECB) officials, as markets anticipate there will be no more rate hikes in the foreseeable future.
However, energy and food prices are not factored into the core inflation index.
Oil prices are on the rise, with Brent crude heading towards $100 per barrel and there being even more room for further growth in oil prices.
As a result, the overall personal consumption expenditures (PCE) price index in the Eurozone and the US are both expected to pick up on a monthly basis to one of the strongest readings in 2023.
Eurozone and US inflation has been responsive, somewhat, to consecutive interest rate hikes - Shutterstock
Meanwhile, the Fed and ECB reports are scheduled to come out Friday and are both expected to show a decline in headline Eurozone and US inflation, with Eurozone inflation forecast to slow to 4.5 percent.
The upcoming PCE report might be the last government figures that policymakers see for some time ahead of a likely shutdown that would start October 1, Bloomberg reported.
Other data this week include those on new-home sales, consumer sentiment and durable goods orders. The Census Bureau will publish its third estimate of second-quarter growth as well as benchmark revisions, according to Bloomberg.
Across the pond, Europe’s biggest economy may be contracting at present, and the index — due Monday — will show whether there’s any sign of optimism that growth in Germany is improving.
In the UK, which last week surprised investors by pinning interest rates instead of hiking them, final gross domestic product data for the second quarter will be released on Friday.
In the meantime, Hungary’s central bank is poised to cut its key rate by a full percentage point for a fifth month on Tuesday, Bloomberg reported, with Czech officials expected to pin rates.
Overall, annual US inflation has fallen sharply since hitting a 40-year high of 9.1 percent in June, 2022, according to The Guardian, and Eurozone inflation too.
