Following better than expected US employment data for August, the key question for US longer term yields and the USD is whether the Fed Chairman is a forecaster or a reactor to inflation data. The US CPI for August is scheduled for release on Friday. The current consensus is for a 0.4% month-on-month rise at the headline level and for the core ex-food and fuel measure to rise 0.2% month on-month. The Fed is likely to focus on core and, on its own, a 0.2% month-on month rise in core would probably not justify a policy rate hike at the September 17 FOMC meeting.

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Vis Nayar

Vis Nayar is the Chief Investment Officer and a member of the Executive Management Committee at Eastspring Investments. Vis spearheads Eastspring’s investment platform encompassing equities, fixed income, multi asset and quantitative solutions, and oversees investment offerings across markets.

Information provided is general information and is for educational purposes only, and does not include, or constitute as, financial product advice.