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Blokland’s daily sketch

Blokland’s daily sketch

12-07-2019

US inflation won’t stop Fed from cutting rates

  • Jeroen Blokland
    Jeroen
    Blokland
    Portfolio Manager

US core inflation rose to 2.1% in June, theoretically just above the Federal Reserve’s target. This supports Fed Chairman Jerome Powell’s earlier remarks that the low inflation was temporary. However, with headline inflation at 1.6% and, more importantly, Powell’s increased uncertainty about future growth both in and outside the US, a rate cut this month remains extremely likely. Time will tell if this turns out to be an ‘insurance’ rate cut, which tend to be very favorable for equity markets, or the build up to the next recession.

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As a senior portfolio manager I use charts to illustrate financial issues every day. I tweet my favorites as @jsblokland and was named 'one of the 50 most important people for investors to follow in 2018' by MarketWatch.
Previous editions of the daily sketch can be found on my personal financial markets blog. All graphics provided are collected from Bloomberg data and public websites. They do not always reflect my personal opinion and may also not necessarily reflect the opinion of Robeco. Please cite all references or quote the original source if replicating content.

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