Wall Street sees US inflation defeated
Wednesday 13 September 1995
The bond market rallied in the expectation of further cuts in interest rates by the Federal Reserve, whose policy committee meets in two weeks' time. The dollar hit an eight-month high against the yen, approaching 101, and the Dow Jones index surged more than 40 points to close at a new record of 4747.21.
Laura Tyson, President Clinton's economic adviser, said the inflation performance was pleasing. ''There are no signs at this point of any significant incipient inflationary pressures,'' she said. Analysts on Wall Street shared her optimism. ''There was already a generally positive outlook for inflation, and that has been reinforced,'' said Raphael Marrone of investment bank Deutsche Morgan Grenfell in New York.
Prices for finished manufactures fell by 0.1 per cent in August, taking their year-on-year rate of increase down to 1.3 per cent. This headline figure was helped by a 0.9 per cent decline in the price of energy goods. Food prices were unchanged.
The ''core'' index, excluding food and energy, rose 0.1 per cent during the month, to a level only 2 per cent higher than a year earlier. A surprise increase in car prices was offset by flat prices for clothing.
There were more encouraging signs in the inflation pipeline. The cost of manufacturers' materials fell 1.4 per cent, to stand 1.7 per cent lower than a year earlier. Excluding energy costs and foodstuff, the fall in August was 0.9 per cent.
Some economists remained doubtful that the Fed would cut rates at the 26 September meeting of its Open Markets Committee. Mark Cliffe at HSBC Markets said: ''It will want further evidence on growth and good news on the budget.'' Clashes between the administration and Congress over the Federal budget are expected to flare as the 30 September deadline for agreement approaches.
However, a majority in the financial markets reckons interest rate reductions later in the year are likely. Figures on consumer prices, out today, retail sales and industrial production will provide further clues about the state of the US economy.
Sales of the tablet are set to fall again, say analysts
Met Police confirm there was a 'minor disturbance' and that no-one was arrested
George Lucas criticises the major Hollywood film studios
Does Chris Grayling realise what a vague concept he is dealing with?
Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets
Parties threaten resort's image as a family destination
I Am Bread could actually be a challenging and nuanced title
- 1 Indian footballer Peter Biaksangzuala dies after injuring spine doing somersault celebration
- 2 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 3 Banksy arrest hoax: Internet duped by fake report claiming that the street artist's identity has been revealed
- 4 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 5 Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
London bus driver allegedly kicks gay couple off for kissing
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
Lord Freud: Tory welfare minister apologises after saying disabled people are 'not worth’ the minimum wage
iJobs Money & Business
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...