Goldman Sachs: CPI largely in line with expectations, Fed keeps rate hike option on the table

Odaily reports that Goldman Sachs economist Alexandra Wilson-Elizondo said: "Today's CPI was largely in line with expectations, ostensibly the result investors were hoping for, but it does raise the stakes for next week's rate decision. The challenge is that the data does not fully reflect some of the recent inflationary pressures, and there is little evidence that inflation is returning to target in the near term. The survey period for this report predates the latest round of energy price increases, and also predates the broadening of the commodity rally from energy into metals and agriculture. Today's inflation data does not eliminate the possibility of stronger price pressures ahead.

In summary, today's in-line data will allow the Fed to keep the rate hike option on the table without being forced to act, so the market may next focus more on Warsh's communications, energy prices, labor market data, and what happens next, rather than on what was released today."