FT News Briefing US inflation finally takes a breather
Aug 11, 2022
Recent reports reveal a notable slowdown in US inflation, bringing relief to markets. Disney shines with a surge of 15 million new subscribers on Disney+, beating expectations. Meanwhile, social media is betting on live stream shopping as the next big trend, inspired by successes in Asia, despite challenges in the West. The discussion also touches on how these economic shifts could affect Federal Reserve policies, especially concerning interest rates and the job market.
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US Inflation Slows
- U.S. stocks rallied after July's inflation report showed a slower price increase of 8.5%, influenced by falling energy prices.
- The two-year treasury bond had a strong positive reaction, while longer-term bonds like the 10-year showed a more limited response.
Fed's Response
- The Federal Reserve likely won't ease interest rate hikes based on one inflation report.
- They consider overall data, including the recent strong jobs report showing over 500,000 jobs added.
Shelter Inflation
- Shelter inflation, especially rent, remains high and can contribute to sustained inflation.
- While some easing was observed, it is still above desired levels, reflecting the overall inflation situation.