The consumer price index rose 3.7% in August from a year earlier, but the overall pricing trends may remain positive enough for the Federal Reserve to decide to keep interest rates steady when it meets next week, asset managers said.
Greg Wilensky, head of U.S. fixed income at Janus Henderson Investors, said the jump in headline CPI, which was driven by the jump in gasoline prices, was generally expected.
"While these numbers do not change our, and the market's, expectations that the Fed will hold the target Fed Funds rate unchanged at the September meeting, the slightly stronger number can influence the tone of the press conference and Summary of Economic Projections," he added. "We continue to expect some reduction in the number of participants projecting further hikes, but probably not enough to move the median projection of one more rate hike. That said, we believe that we have likely seen the last rate hike for this cycle, as the economic data that the Fed will see over the coming months will keep them on hold and allow the impact of 5.25% of prior hikes to slow the economy and inflation."
Janus Henderson has about $322 billion in assets under management.