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    • Stock market today: The Dow Jones ends with a slight gain after the CPI inflation reading
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    Stock market today: The Dow Jones ends with a slight gain after the CPI inflation reading

    Umito Posted on

    Don’t expect the Federal Reserve to start making big promises about further monetary policy easing after October’s Consumer Price Index reading matches market expectations but shows plenty of stickiness prices, said Steven Blitz, chief U.S. economist at TS Lombard. in a Wednesday afternoon note.

    “October CPI’s message to the Fed is tread lightly when it comes to guiding future rate cuts,” Blitz wrote, noting that this was also the Fed chair’s message , Jerome Powell, during his press conference last week. Nothing in the data could change Powell’s mind, Blitz said.

    “Keep in mind that prices generally do not slow down in a full employment economy,” he said. This is reflected in TS Lombard’s CPI diffusion index (see chart at top), which hovers around 50% – meaning half of the sub-indexes have higher three-month inflation rates at their 12-month rate, while the other half have the opposite. That’s not particularly unusual, Blitz said, but he added that it’s not a scenario involving disinflation.

    “In summary, with unemployment at 4.1%, renewed real consumer purchasing power, and continued federal spending, there is little reason to expect inflation to fall. one-off measures each month, auto insurance, used cars, but inflation is stabilizing at a level that reflects general macroeconomic conditions,” he wrote. “Another cut from the Fed, call it unemployment insurance, then watch and wait to see what Trump’s planned disruptions bring.”

    Umito
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