Inflation in the US dropped to 1.9% in December 2018 from 2.2% in November. It is the lowest inflation rate since August 2017 and is largely down to a fall in the price of fuel. Minutes from the FOMC meeting in December showed that some policymakers were reluctant to hike rates owing to a lack of inflationary pressures and this appears to support that reluctance.
Donald Trump looks to be edging closer to declaring a national emergency in a bid to build his beloved border wall. If he does, it is likely that the government shutdown will come to an end, but recent polling shows that the vast majority of the American public is against building a wall. The former reality television star claimed his lawyers told him the action would withstand legal scrutiny ‘100%’.
The only release of note from the US today is December’s consumer inflation expectations. On Wednesday, we will see mortgage applications up to 11 January 2019, before Thursday’s latest initial jobless claims figures. Friday is arguably the biggest day for the US, with industrial and manufacturing production figures from December and the University of Michigan’s preliminary reading of consumer sentiment. All eyes will also be on the government shutdown and whether a way out of it can be negotiated sooner rather than later.
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