It didn't go quite as expected when the US inflation figures for January were published on Wednesday. Price developments have simply gone in the wrong direction in the first month of the year. Inflation itself rose from 2.9 percent to 3.0 percent, and core inflation - which excludes energy and food from the equation - also rose by 0.1 percentage point to 3.3 percent.
Chief economist Allan Sørensen from the Confederation of Danish Industries notes that inflation has now risen for four months in a row.
- It's a terrible US inflation report. The inflation report makes the prospect of interest rate cuts disappear on the horizon, he estimates.
Long prospects for interest rate cuts
According to MarketWire, the financial markets are now predicting that an American interest rate cut will not come until December. Previously, the expectation was that it would come as early as September.
As long as prices rise much more than the target of two percent per year, interest rate cuts should not be expected, which would give the economy even more impetus.
At the same time, there is uncertainty about what Donald Trump's policy will mean for the American economy and for inflation more specifically.
- It will be crucial to follow price developments in February, when tariff increases on goods from China have come into effect. In the figures for February, we see how the higher tariffs affect American consumer prices. It will be particularly crucial whether the higher tariffs spread to other goods, writes Kristian Skriver, senior economist at Dansk Erhverv.
/ritzau/
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