The August CPI in the US was a disappointment to those looking for clear signs that inflation has peaked. Food and shelter were the main culprits this time round.
But as the charts below suggest, headline inflation is topping out, and so are core goods inflation and wages (probably).
So this puts us into even more dangerous territory as far as the Fed is concerned, with Chairman Powell giving the impression that he is ready to keep raising rates until there are clear signs of a inflation returning towards 2%. Pushing policy rates up to 4% and then pausing is something equity markets can understand and live with. But much beyond that and the perceived tail risks to growth and profits will likely increase in a non-linear fashion.