Analyst: Fiscal policy may dominate interest rate outlook next year

Ballinger Group foreign exchange analyst Kyle Chapman said the U.S. CPI rose in line with expectations in October, recording an annual rate of 2.6%, with core inflation holding steady at 3.3%.The report is not expected to have much impact on the Federal Reserve, but it may indicate that some in the market are already bracing themselves for higher numbers.Chapman said the details of the inflation data look reasonable enough that easing is likely to continue in the short term, though there will be plenty more indicators coming out before December.Chapman added that it is likely to be fiscal policy that will dominate the interest rate outlook next year.