Inflation in focus

By BlackRock

US measures of core inflation

US measures of core inflation

Source: Thomson Reuters Datastream and BlackRock Investment Institute. Jun 22, 2017.

  • What's the Federal Reserve's next move? Follow inflation data closely for cues. Earlier this week, the Fed raised interest rates for the second time this year in a widely anticipated move, brushing off a recent run of mixed economic data including weakening inflation numbers.
  • The central bank's policymakers described such weakness as transitory, but said they would closely monitor inflation developments. Market participants are concerned that further fizzling in inflation could derail the path of future rate hikes.
  • The Fed expressed confidence in the economic growth. Its latest quarterly economic forecasts the US economic growth of 2.2% in 2017, up from the previous estimate in March.
  • Chair Janet Yellen indicated that the Fed still expected inflation to reach the 2% target in the medium term, bolstered by strengthening labour market.


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This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or financial product or to adopt any investment strategy. The opinions expressed are as of 26 June 2017 and may change as subsequent conditions vary.