US Inflation Stays Put

Following an unexpectedly robust unveiling of the Non-Farm Payroll report earlier this month, the spotlight swiftly shifted to the eagerly awaited US inflation report. This pivotal report held the power to illuminate the Federal Reserve’s stance on interest rates as we navigate forward. Anticipation had been building, with all eyes on the year-over-year figures, poised for a potential shift from 3.7% to 3.6%. Yet, as the numbers emerged, they held firm at 3.7%, resisting any expected wane. 

Delving into the finer details, inflation did decelerate from 0.6% to 0.4% on a month-to-month basis, though not quite aligning with the market’s more conservative 0.3% projection. Meanwhile, the core inflation rate fell in line with consensus, showing a decrease from the prior 4.3% to a more tempered 4.1%. The month-to-month core figure remained steadfast at 0.3%, adhering to expectations. 

Amid these financial fluctuations, the release of the FOMC minutes recently offered a glimpse into the prevailing sentiments among its members, casting a shadow of caution over the prospect of further rate hikes this year. The awaited inflation data, therefore, held the promise of becoming a significant indicator for the upcoming November meeting. In the current landscape, the CME FedWatch Tool presents a 92.6% probability of a forthcoming pause in November, marking a slight reduction from the earlier 95% expectation that prevailed prior to the release. 

Sources: US Bureau of Labour Statistics, CME Group 

Piece written by Tiaan van Aswegen, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.