🍎 🍕 Less apples, more pizza 🤔 Have you seen Buffett’s portfolio recently?Explore for Free

US CPI data supports 25 bps Fed rate cut in December, Macquarie says

Published 14/11/2024, 07:58 pm
© Reuters.
NDX
-
US500
-
US10YT=X
-
VIX
-
DXY
-

Investing.com -- Macquarie’s team noted that the latest consumer price index (CPI) data supports their call for a 25 basis points interest rate cut in December.

Inflation ticked higher in October, closely matching Wall Street’s estimates, according to the Bureau of Labor Statistics report on Wednesday.

The CPI, a key gauge of costs across a range of goods and services, rose 0.2% for the month. This brought the annual inflation rate to 2.6%, a slight increase from 2.4% in September.

Both figures were in line with Dow Jones’ predictions.

When excluding food and energy, inflation was a bit stronger. Core CPI rose 0.28% in October, moderating slightly from September and translating to a 3.3% annual rate, which also aligned with expectations.

Within the details, core goods prices remained flat month-over-month, even as used car and truck prices saw a substantial gain.

Core services, excluding rent and owners' equivalent rent (OER), slowed to a 0.3% monthly increase, largely due to a decline in airline fares, which are calculated differently in the core Personal Consumption Expenditures (PCE) index.

Meanwhile, rent and OER both accelerated, though they remain on downward trends. OER rose 0.4% for the month, while rent of primary residence saw a 0.3% increase.

“As in recent months, we suspect the core PCE reading should be softer given the sub-component details,” Macquarie economists David Doyle and Chinara Azizova commented.

As for the 3.3% annual core inflation rate, economists believe this figure “should moderate in coming months, as base effects are favorable, particularly in 1Q24.”

“Threatened tariffs present an upside risk to the outlook beyond this,” they added.

Stock market futures edged up after the report’s release, while Treasury yields declined. The data prompted traders to significantly increase the likelihood that the Federal Reserve will lower its benchmark interest rate by an additional quarter-point in December.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.