Central banks & inflation
Moving in the right direction
- US CPI inflation in December fell to 6.5% in line with expectations, largely driven by energy costs.
- Several Fed speakers have hinted at a potential slowdown in the pace of rate hikes. Markets cemented their view of a 25-bps hike, though given ongoing labour market strength, a half-point hike in February is still a possibility.
- Chinese consumer inflation rose to 1.8% driven by higher food costs, although core inflation is muted at only 0.7% (year-on-year).