Investors will focus on next week’s CPI release
On Tuesday, investors will analyze one of the most important data points the Federal Reserve will consider in its next interest rate decision: the October Consumer Price Index (CPI).
The report predicts headline inflation to be 3.3%, slowing from September’s annual price rise of 3.7%, according to Bloomberg estimates. On a month-on-month basis, consumer prices are expected to rise 0.1% in October, slower than the 0.4% month-on-month rise in September.
It is highly likely that the increase in the headline figure has become smaller due to lower energy costs.
On a “core” basis, which excludes more volatile food and gas prices, prices in October are expected to rise 4.1% year-on-year, according to Bloomberg data, which is the same annual increase seen in September. Match the rate. Monthly core prices are expected to increase by 0.3%, which is also in line with the monthly increase in September.
“October’s modest increase in headline CPI is likely to be overshadowed by other core corporate metrics,” Wells Fargo wrote ahead of the report.
The bank said core CPI is likely to show “slower development in inflation,” adding: “Shelter inflation is likely to resume in October, but the steady boost from health insurance will continue to rise with this month’s announcement.” “It will probably start to rise. The deflation in goods is probably coming to an end,” he added. . ”
The Wells Fargo team still expects core CPI to rise about 3% annually by this time next year, noting that “a slowdown in inflation in the coming months does not necessarily mean an inflation victory.”