On a monthly basis, the general index remained unchanged in October, while the consensus expected an increase of 0.1%.
The inflation in the US It fell to 3.2% in October in an interannual rate, according to data published by the US Bureau of Labor Statistics. The figure was slightly below the 3.3% estimated by the market consensus. For its part, core inflation, which is key to Fed and excludes food and energy, fell to 4%, from 4.1% the previous month, while it was expected to remain unchanged.
In monthly terms, the general index remained unchanged in October, while the consensus expected an increase of 0.1%, after the 0.4% it advanced to in September. Meanwhile, the core rate rose 0.2%, up from 0.3% last month, while the consensus expected another 0.3%.
Wall Street rose 0.6% driven by Apple and weak US inflation
According to the organization that disseminates the data, “the housing index continued to rise in October, offsetting a drop in the gasoline index and causing the seasonally adjusted index to remain unchanged for the month. The energy index fell 2.5% for the month, as a 5% decline in the gasoline index more than offset increases in other energy component indices.”
US inflation: why it is key for the Fed
According to Balanz, the reaction of the interest rates The inflation surprise was marked, with 2- and 10-year Treasury bond rates compressing approximately 15bps to 4.87 and 4.49%, respectively. On the future side of the S&P 500 and of Nasdaq, these showed marked increases of 1.2% and 1.5%, respectively, once the inflation data is known. The data today along with the employment data at the beginning of the month support the idea that the Fed will not raise again in December, however, there is still a report of employment and inflation before the last Fed meeting in 2023.
The Federal Reserve (Fed, central bank) of the United States recently kept its reference interest rate at 22-year highs (in a range of 5.25% to 5.50%), for the second consecutive meeting.
The decision led some analysts and traders to predict that the Fed had already put aside the tightening of its monetary policy.
However, since then, several central bank officials, including Fed Chairman Jerome Powell, have indicated that if necessary they are willing to raise rates again.
Raising rates means making credit more expensive, and thereby cool consumption and investment, reducing pressures on prices
Source: Ambito
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