What will happen to US inflation
US inflation: moderation of components linked to the reopening vs acceleration of rents, the analysis by Antonio Cesarano, Chief Global Strategist of Intermonte
The July US inflation figure remained unchanged compared to June (+ 5.4% y / y), due to the substantial balance between the moderation of some components that had recorded a sharp rise after reopening (in particular car prices and used trucks, from +10.5 to + 0.2% m / m, car and truck rental, from + 5.2% to -4.6% m / m, airline tickets, from +2.7 to – 0.1% m / m) against, instead, the continuation of the acceleration of the important rental component (it accounts for over a third of the total).
The Fed has labeled inflation as a transitory factor giving almost unique weight to the labor market at the moment for the timing of tapering.
However, the growing increase in the important rents component could give more strength to those on the Board who are in favor of an unbalanced tapering, especially on the reduction of securities having mortgages as underlying assets (MBS), currently purchased for $ 40 billion monthly vs the $ 80 billion of Treasury.
In summary: today's data does not bring any news on the possible timing of tapering, adding only a few details on its possible implementation.
On the tapering front, the view is currently awaiting the Jackson Hole symposium (26/28 August) in which Powell could announce that we are closer to tapering, but confirmations are still needed, especially awaiting data on the September job market. and October, except for data from September incredibly above expectations, the latter hypothesis which, at the moment, appears less likely also in light of the reopening of schools today in the US which could slow down in the short term the growth process of those actively seeking Work.
On the scenario front, the following hypotheses remain: 
strategic rate of average decline in the next 3/6 months mainly due to the bottlenecks that slow growth temporary rebound tactics between August / September (up to area 1.50 / 1.60% on treasury 10y) in view of the greater focus on the tapering theme
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/inflazione-usa-cosa-succedera/ on Thu, 12 Aug 2021 06:00:24 +0000.