U.S. Import Prices Rose in September
U.S. import prices saw a notable increase of 1.1% in September, building on a 0.5% rise in August. This uptick suggests potential inflationary pressures within the economy, raising questions about future monetary policy direction. The persistence of import price growth may influence the Federal Reserve's considerations as they weigh the balance between growth and inflation. As such, traders should monitor how this data fits into broader economic trends, particularly in relation to the USD's performance ahead of upcoming Fed meetings.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.075 (median across 8 firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). The recent rise in import prices could align perceptions towards a stronger USD, as highlighted by JPMorgan's positioning in the upper target range.
How firms align
JPMorgan is aligned with the bullish sentiment following the import price increase, setting their target at 1.10. In contrast, BofA remains cautious with a lower target of 1.04, reflecting a more bearish outlook on the USD amid this inflation data. Refer to our internal /reports/jpmorgan and /reports/bofa for detailed analyses.
What the data shows
This data underscores the inflationary trends analyzed in our latest research. For context, last week's forecasts suggested that sustained price increases would likely press the Fed to maintain a tighter stance longer, as outlined in /research/... .
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01U.S. import prices increased 1.1% in September, indicating inflationary pressures.
- 02Traders should be watchful of USD strength as Fed policy considerations could shift.
- 03The next Fed meeting could be pivotal, especially if inflation trends continue.
- 04BofA's lower 1.04 target may signal contrasting views among analysts.
Market implications
Watch for the USD to respond to upcoming economic indicators, particularly the CPI release next week. A breach of 1.08 in EUR/USD could signal further momentum upward. Our consensus remains at 1.075, closely tied to these economic signals.
Risks to this view
Should inflation data decisively contradict these import price trends—particularly a significant drop in consumer prices or increased strength in the labor market—this narrative could shift rapidly. Any dovish statements from the Fed would also serve as a catalyst for a reversal.
Sentiment by currency
USD+EUR~JPY~GBP~Composite USD score: +0.35
Sources & References
How we cover this story