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Nordea expects Fed to deliver three more rate hikes to curb inflation

Nordea links the outlook to falling unemployment, constrained labor supply, and service price and core PCE inflation, arguing wage pressures and higher goods prices could justify further policy tightening.

Reported · Written up by our desk · Central Banks

Nordea analysts Ole Håkon Eek-Nielsen and Jan von Gerich expect the Federal Reserve to deliver three more rate hikes over coming quarters to bring inflation back to target, according to FXStreet.

They point to falling unemployment, constrained labor supply, and rising core PCE and services price inflation as the main drivers of the Fed’s likely path, adding that wage pressures and higher goods prices could support additional policy firming.

In FXStreet’s market wrap, GBP/USD advanced to a fresh monthly high above 1.3550 and was trading around that level, with the US dollar under pressure after disappointing US retail sales data.

The same wrap said Gold rebounded and closed near $4,400 on Friday, supported by a softer US dollar and reduced expectations of an imminent Fed hike, while July inflation data matched expectations, with headline CPI up 0.1% month over month and core CPI excluding food and energy up 0.2% month over month.

Latest closeGold $4,432.00 ▲1.6%|GBP/USD 1.354 ▲0.3%

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