Has the door closed on the 50-bps cut? Not so fast. US Core CPI may still sway skeptic markets, rocking Gold, the US Dollar and indices. Live coverage.
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CPI inflation lands on skeptical markets
No fewer than 254K jobs were created in September – leaving markets convinced that the strength of the US economy may even cause doves at the Federal Reserve (Fed) to prefer a smaller, 25-bps rate cut. However, if inflation falls, there is still room for some optimism about faster slashes to borrowing costs.
The Consumer Price Index (CPI) is set to show an ongoing decline in inflation in September, allowing the world's most powerful central bank to take its foot off the pedal.
While the Nonfarm Payrolls (NFP) is a challenge for traders – a good outcome lowers the chances of fast rate cuts but is good news for the economy – it's straightforward with inflation.
A strong CPI report is Gold bearish, stocks bearish, US Dollar bullish.
A weak CPI report is Gold bullish, stocks bullish, US Dollar bearish.
The No. 1 figure to watch is core CPI MoM, which is the best representation of what the Fed cares about – recent developments in underlying inflation.
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