Inflation in US accelerates, Fed most likely increases interest rates

Baku. 14 September. REPORT.AZ/ Inflation forecast for the US in August is projected to increase by 0.3%, but the actual price increase was 0.4%. 

Report informs, thus, an annual inflation up by 1.9% in August. Notably, annual inflation was projected to be 1.8% in August. As a result, the probability of increasing the discount rate by Federal Reserve System (Fed) until the end of 2017 has risen to 44%. Notably, this figure was 22% on September 8.

Although, the higher inflation than expected, has increased US-dollar's exchange rate, then the US-dollar has dropped again. Thus, the exchange rate has dropped from 1.19 USD/EUR to 1.1840 and is now back to 1.19.

Analytical Group of Report believes, US-dollar will remain at low level until inflation in the US approaches its target of 2% oil price will make $ 55 per barrel: “Increase in discount rate and rise in US-dollar rate can start from the mid-2018”.