According to the US Department of Labor, inflation in September compared to the previous month was the highest in the last 3 months – on a monthly basis, the indicator rose by 0.4% (consensus forecast 0.2%), and on an annual basis – slightly decreased from 8.3% to 8.2%. At the same time, Core inflation (Core CPI), which does not include the cost of food and energy resources, amounted to 0.6% on a monthly basis and 6.6% on an annual basis. The annual figure was the highest since 1982. Analysts note that such a report confirms the concerns of the US Federal Reserve about a steady increase in price pressure in the US economy. And for inflation to return to the target, further rate increases at an accelerated pace will be required. The released data increase the probability of a fourth consecutive Fed rate hike by 75 bps at the November 1-2 meeting (the market is now waiting for this with a 95% probability). The rate forecast for the end of the year has shifted to the range of 4.5-4.75%. It is worth noting that the Fed is raising the rate at the highest rate since the 80s. And against this background, experts fear that as rates move further into the area limiting economic growth, the risks of recession in the economy will increase. The released inflation data provoked a decline in stock indices by 1.5-2.7%. The yield of 2-year treasuries exceeded 4.5%, and the dollar exchange rate rose again against all major competitor currencies.
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