US: Inflation optimism distorted - ING

Discounting the hurricane-related distortions to US headline CPI and retail sales, the softer 0.1% MoM change in core CPI has dented any trivial US inflation optimism, according to analysts at ING.

Key Quotes

“The fallout may be limited given the lack of inflation premia priced into markets, though the lack of any upside risks to the long-run US economic outlook reaffirms the idea of structurally low bond yields for longer. Such an environment supports our strategically bearish USD view. Fed speakers this are unlikely to rock the boat - especially as the Sep minutes suggest that confusion seems to reign within the committee.”