Donald Trump’s latest announcement of no tariffs on gold has created significant buzz, coinciding with growing speculations over impending US inflation figures that are poised to stir up volatility in the cryptocurrency markets. Expectations are high for a surge in inflation, and the upcoming report on cryptocurrency markets is eagerly awaited as financial institutions offer their forecasts.
What Are Experts Saying on US Inflation?
In the hours leading up to the release of new US inflation data, forecasts predict annual increments in both core and headline inflation figures. A minor dip of 0.1 points is anticipated for the monthly headline inflation, yet an opposite trend is expected for core inflation. This report aims to shed light on how tariffs affect inflation rates.
As we approach the unveiling of these figures, how are major financial institutions gearing up? Should inflation exceed expectations, cryptocurrencies could face a decline as the likelihood of interest rate cuts may lessen.
How Do Banks View the Future?
Numerous banks have spotlighted their predictions for the upcoming inflation data.
Predictions from ANZ
ANZ foresees a 0.32% monthly uptick in core Consumer Price Index (CPI). They highlight deflationary trends within core services, excluding rent, warning that unforeseen changes might negatively alter their expectations.
ING Bank’s Perspective
ING projects a 3% rise in July’s CPI and question if this supports a rate cut. Despite a weakening labor market, ING believes that even a rising CPI may not deter rate reductions. Their core inflation estimate for the month rests at 0.4%, which is higher compared to others.
Next, Goldman Sachs economists predict a monthly increase of 33 basis points in core CPI.
“Should new labor market trends confirm and unemployment rise, it’s unlikely to hold back the FOMC. If the inflation figures match our projections, focusing on labor market risks and Fed policies at the Jackson Hole symposium may help mitigate uncertainties.”
Morgan Stanley anticipates a 32 basis point increase monthly in CPI, foreseeing 3.04% annually. Their prediction includes more visible tariff impacts on basic goods as service inflation weakens.
“Most price effects due to tariffs are predicted for summer. Nonetheless, there’s a risk for a more gradual rise throughout the year. Timing remains crucial, as economic models gauge price impact, not timing. Sifting through noise is challenging, but frequent data and market insights guide us.”
The specific forecasts and models underscore how tariff effects could manifest over time, providing crucial insights into future economic scenarios:
- The reported monthly core inflation jumps could have noticeable impacts.
- Rising CPI figures may affect interest rate decisions.
- Treasures trade with fine margins on service and goods inflation impacts.
With these elements converging, markets await US inflation figures, which will likely ripple through financial territories, especially affecting cryptocurrency movements and interest rate strategies.
