US inflation: Headline CPI is dropping, but core CPI is stuck

post: CHINA FOREIGN MINISTRY: IMPOSES SANCTIONS AGAINST THREE U.S. MILITARY FIRMS, 10 SENIOR EXECS OVER U.S. ARMS SALE TO TAIWAN FROM THURSDAY

Ms Schnabel noted that since the Governing Council’s previous monetary policy meeting on 17-18 July 2024 there had been repeated periods of elevated market volatility, as growth concerns had become the dominant market theme. The volatility in risk asset markets had left a more persistent imprint on broader financial markets associated with shifting expectations for the policy path of the Federal Reserve System. The reappraisal of expectations for US monetary policy had spilled over into euro area rate expectations, supported by somewhat weaker economic data and a notable decline in headline inflation in the euro area. Overnight index swap (OIS) markets were currently pricing in a steeper and more frontloaded rate-cutting cycle than had been anticipated at the time of the Governing Council’s previous monetary policy meeting. At the same time, survey expectations had hardly changed relative to July. post: ECB ACCOUNTS: INFLATION WAS EXPECTED TO RISE AGAIN IN THE LATTER PART OF THIS YEAR || IT WAS THEN EXPECTED TO DECLINE TOWARDS THE TARGET OVER THE SECOND HALF OF NEXT YEAR ECB ACCOUNTS: RECENT NEGATIVE SURPRISES IN PMI MANUFACTURING OUTPUT INDICATED POTENTIAL HEADWINDS TO THE… post: ECB ACCOUNTS: THE RISK OF DELAYS IN REACHING THE ECB’S TARGET WAS SEEN TO WARRANT SOME CAUTION TO AVOID DIALLING BACK POLICY RESTRICTION PREMATURELY ECB ACCOUNTS: FOREIGN DEMAND WAS SHOWING SIGNS OF WEAKNESS, WITH FALLING EXPORT ORDERS AND PMIS ECB ACCOUNTS: CORE INFLATION AND…