A report released by the Labor Department on Friday showed a modest uptick in consumer prices in the U.S. in the month of July.
Dudley predicted such annual inflation readings could remain under pressure for six to 10 months. It's the fourth month in a row that the core CPI increased by 0.1%. Some blame the recent run of low figures on transitory factors - cheap airfares being the latest culprit cited - while others aren't so sure.
Speaking to a group of reporters, Evans added that he believes waiting until December to raise rates would give the Fed time to assess whether inflation is moving back toward the Fed's 2 percent annual target.
USA consumer prices rose slightly in July, indicating that muted inflation pressure might complicate Federal Reserve's decision to raise interest rate. This compares with a 0.1% gain in June and was less than the 0.1% gain expected by Bloomberg. Overall consumer prices rose by 0.1% from June, putting them just 1.7% above their year-earlier level.
Interest rates have already had a big move lower this week, so are showing little reaction to this morning's numbers showing inflation continuing to come in below central planner expectations.
Investors will brace for a release of consumer-price inflation data (CPI) that could clarify how much the Federal Reserve will tighten monetary conditions. It also contains many components that feed into the Fed's preferred index. But it has since backtracked and in June registered a 12-month gain of just 1.4 percent.
A key gauge of underlying producer price pressures that excludes food, energy and trade services was unchanged last month.
Sheng said the price increase in the PPI accelerated in the steel and mineral industries while the price rise in the coal, non-ferrous, and oil sectors slowed.
Inflation is "weaker than the Fed would like, weaker than anyone would like, but not so weak that it calls the whole outlook into question", said Roberto Perli, partner at Cornerstone Macro LLC in Washington, and a former Fed official. But while the Fed could win the battle in the short-term, it seems likely to lose the war - as I suspect inflation will prove frustratingly low next year. Economists had expected another 0.1% uptick. It is expected to delay its next rate hike until December while it monitors inflation.
The tensions, since Trump's "fire and fury" comments on Tuesday, have wiped out almost US$1 trillion (RM4.2 trillion) from the global equity markets. "We've got a ways to go".
The index for dairy and related products also turned up in July, rising 0.3 percent after a 0.5-percent decrease in June.
At the time of the report, the Euro was down 0.17% against the Dollar at $1.1752, with the Euro aiming for $1.18 levels should Eurozone inflation figures impress and U.S numbers disappoint through the day. The yield on the two-year note, which is more sensitive to changes in interest-rates, fell to 1.294% from 1.335%.