According to the latest data from the United States, the U.S. consumer price index in September was once again stronger than expected, crushing the hope of a slowdown in economic growth, and the slowdown may convince Fed to stop hikes. The renewed inflation rise can make the Fed more assured that rate hikes .
Specific data shows:
According to Data from the U.S. Bureau of Labor Statistics, the consumer price index (cpi) in August rose 0.4% from August and 8.2% from the same period last year. Although overall inflation is slightly lower than 8.3% in August, it is still far above the Fed's 2% target.
Excluding the volatile food and energy components, the core price rose by 0.6% for the second consecutive month, indicating that the entire economy is facing widespread and sustained inflationary pressure. By year, core CPI accelerated from 6.3% last month to a 40-year high of 6.6%.
Therefore, analysts warn that the battle against the worst inflation in a generation is far from over — especially because gasoline prices, which once lowered September inflation, have begun to rise again against the backdrop of OPEC and its allies about to cut crude oil production. "It's hard to ignore the impact of excessive growth in total demand in this CPI report." The U.S. financial markets responded negatively to the news, and the Fed is expected to take more radical interest rate measures at its next meeting in early November. The benchmark two-year Treasury yield, which is highly sensitive to Fed's action expectations, rose 15 basis points again to 4.44%, while the 10-year Treasury yield, reflecting long-term inflation, once hit 4%, and then fell back to 3.99%, still up 9 basis points on the day. After the news of
, the US dollar also rose by more than 0.5%, as the prospect of rising interest rates makes the US dollar relatively more attractive.
stock index futures On the contrary, Nasdaq 100 index futures contract fell 2.8%, S&P 500 index futures fell 2.1%, and Dow Jones futures fell 1.7%.
's unexpected rise is mainly due to housing costs. The "housing" sub-item in CPI rose by 0.8% month-on-month, accounting for 40% of the increase in of the core index .
The U.S. Bureau of Labor Statistics calculates housing costs based on the principle of "owner equivalent rent", and some economists believe that this concept cannot accurately reflect the actual housing costs. Even so, Mike Konczal, director of the Roosevelt Institute's macroeconomics , said on Twitter that the rate of rising prices of housing-independent services will bring the overall CPI to 2.5%. In September, the price of airlines alone rose by 42.9% year-on-year.
Laffer Tengler Investment Company President Arthur Laffer said (CPI) this is a very high number. The Fed will certainly raise interest rates by 75 basis points next month, and I wouldn't be surprised if it raises interest rates by 50 or 75 basis points in December. Basically, this quarter is the beginning of the recession, although it may not be shown on the numbers until the first quarter. You can watch from real estate stocks. With a 3.5% unemployment rate, it is impossible for the Federal Reserve to stop hikes by the end of this year. Now anyone says the Fed may turn will be wishful thinking. The Fed must now deal with inflation. The more they raise interest rates, the soft landing becomes a wishful thinking. We will usher in a very weak fourth quarter and may even see negative growth.
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