Lates News

Daniela Hathorn, senior market analyst at Capital.com, said Wednesday's U.S. CPI data is expected to show headline inflation accelerating to around 3.7% in September, reflecting the impact of higher energy prices, while core inflation is expected to be around 2.5%. The divergence between the two is especially important for the Fed. The Fed hiked rates in September, but now faces a difficult task: curbing inflation without putting unnecessary pressure on economic growth. The market is currently pricing in about an 80% probability that the Fed will hold steady in October. A softer core reading could reinforce that expectation and bring some relief to stocks and bonds; an upside surprise could push yields higher again and bring fresh pressure on risk assets.