Market Wire, North America

Underlying consumer prices climbed by slightly more than expected in the United States last month, reinforcing the case for a tightening bias from the Federal Reserve, and putting modest upward pressure on the dollar. According to data published by the Bureau of Labor Statistics this morning, the core consumer price index—with highly-volatile food and energy prices excluded—climbed 0.4% month-over-month, rising from the 0.2% pace set a month earlier, and was up 2.8% year-over-year. This topped consensus estimates among economists polled by the major data providers ahead of the release, which were set closer to the 2.7% mark. Headline prices rose...

Oil prices are plunging and currency markets are reversing direction after US President Donald Trump said he would “suspend the bombing and attack of Iran for a period of two weeks,” “subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz”. “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will,” Trump wrote earlier today, before Pakistan’s prime minister suggested that the two sides agree to a two-week ceasefire*, with Iran permitting traffic to flow through the Strait...

The Federal Reserve left interest rates unchanged this afternoon and did little to acknowledge an Iran war-driven shift in the balance of risks facing the US economy in the accompanying statement, suggesting that officials could resist adopting a more hawkish posture in the near term. In the widely-expected decision, the Federal Open Market Committee voted by an 11-to-1 margin to maintain the target range for the federal funds rate between 3.50 and 3.75 percent. Trump appointee Stephen Miran dissented in favour of cutting rates, while Christopher Waller—who had previously lobbied for more easing while correctly anticipating a downturn in labour...