US inflation down to 6.5%: now what will the Fed and the ECB do?
New braking for US inflation. In December, consumer prices grew by 6.5% on an annual basis, after the slowdown that was recorded in November of 7,1%. On a monthly basis, there is a decrease of 0.1%. “December data on consumer price trends confirm a slowdown in inflationary pressures above all linked to the sharp drop in energy prices (-4.5% y/y). Core prices are still high (+5.7% y/y, +0.3% m/m) and suggest that the Federal Reserve will continue with a policy of raising the cost of money but will be less restrictive than in previous months”. He underlines it Filippo Diodovich, Senior Market Strategist of Ig Italia, commenting on US inflation data.
“Our expectations about the Fed’s next moves are strengthened with December’s macro inflation data. We believe – indicates the analyst – that the FOMC in the next meeting it will decide to increase the cost of money by “only” 25 basis points, bringing the reference rates from the 4.25%-4.50% range to the new 4.50%-4.75%. The markets showed a significant reaction especially on the currency one where we witnessed a drop in dollar quotes (increased probability that the Fed will be less hawkish in the February meeting).
Piazza Affari closed the fourth weekly session higher. The final Ftse Mib settled at 25,733 points, gaining 0.73%. In Europe, on the other hand, in its Economic Bulletin the Central Bank revised its inflation projections upwards to 8.4% in 2022 and 6.3% in 2023. On the main list, energy sources with the largest capitalization (Enel +1.37%, Eni +1.24%) and Tim, up 1.54% pending a solution on the network dossier. The industrialists are also in tune with Stellantis at +0.83%, Iveco +4.36% and Pirelli +1.75%. Among the financials, Unicredit +1.45%, Intesa +1.08%, while Generali moved against the trend with a filing of 0.09%.
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