Posted 2/22/2024, 10:02:00 AM
US Inflation Cools But Stays High, Limiting Rate Cut Hopes and Risking Dollar Surge
- Inflation in the US has moderated but remains sticky, reducing hopes for interest rate cuts
- Services inflation is rising due to a strong US labor market and wage growth
- Other major economies have more room to cut rates, diverging monetary policy from the US
- Tighter US policy could spur dollar strength, hitting poorer countries and Wall Street
- Markets do not seem to have priced in the risk that US rates will stay high this year