U.S.September CPI above expectations,October rate hike bets rose to approximately 40%

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⚡️Analysis: The Fed's October or November rate hikes ahead of the midterm elections are uncommon, with markets watching Warsh's remarks

BlockBeats news,October 15, the U.S.September CPI rose year-on-year by 3.7%and month-on-month by 0.6%, while core CPI rose year-on-year by 2.6%and month-on-month by 0.3%, both above market expectations. After the inflation data was released, market bets on a Fed October rate hike 25 basis points rose to approximately 40%, compared with approximately 20%.

The Fed just raised rates by 25 basis points last month, its first rate hike since 2023. The next rate decision will be announced on October 28, and November 3 the U.S. midterm elections are only 6 days away.

Inflation remaining above the Fed's 2%target and resilient economic activity provide grounds for further rate hikes. Economists at Jefferies, Nationwide, and other institutions believe that October and December rate hikes are both supported by the data; however, some analysts expect the Fed to consider the timing of the elections and potential economic vulnerabilities and choose to defer action until December.

Historical data shows that the Fed's October or November rate hikes ahead of midterm elections are uncommon. Markets will watch remarks by Fed Chair Kevin Warsh before the pre-meeting blackout period begins to assess his policy stance. This meeting will not only test the Fed's resolve to address a rebound in inflation, but also its ability to maintain policy independence and market confidence during a politically sensitive period.

Original link https://m.theblockbeats.info/flash/372003

Key points

U.S.September CPI rose year-on-year by 3.7%and month-on-month by 0.6%。
U.S.September core CPI rose year-on-year by 2.6%and month-on-month by 0.3%, both above market expectations.
market bets on a Fed October rate hike 25 basis points rose to approximately 40%, compared with approximately 20%。
The Fed raised rates by 25 basis points last month, its first rate hike in 2023 years.
The next rate decision will be announced on October 28, and November 3 the U.S. midterm elections are only 6 days away.
Economists at Jefferies, Nationwide, and other institutions believe that October and December rate hikes are both supported by the data.
Some analysts expect the Fed to defer action until December。
The report notes that the Fed's October or November rate hikes ahead of midterm elections are uncommon.
Markets will watch remarks by Fed Chair Kevin Warsh before the pre-meeting blackout period begins.

AI-assisted interpretation

The following is analysis, separate from reported facts. Verify important claims independently.

CPI and core CPI were both above expectations, indicating that the inflationary pressure described in the report remains high. Markets therefore increased expectations for a Fed October rate hike 25 basis points, but the report also notes that the timing of the elections and potential economic vulnerabilities could lead the Fed to delay action.

Why it matters to readers

The timing of the rate hike may affect how markets assess the Fed's policy direction;October 28 the rate decision and Kevin Warsh's remarks will be the focus of market attention.

A rate hike generally represents tighter monetary policy. Beginners should focus on whether the inflation data, rate hike bets, and the Fed's actual decision are consistent.

Risks and unknowns

The report does not state whether the Fed will ultimately raise rates by October or December rate hike.
“October and December rate hikes are both supported by the data” is an analytical judgment by institutional economists, not a confirmed policy decision.
The report does not provide an official Fed statement or original market data for cross-verification.
The report does not specify the content of Kevin Warsh's remarks or their ultimate policy impact.

U.S.September CPI above expectations,October rate hike bets rose to approximately 40%

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