The US inflation rate rose to 2.6% in October, beating market expectations, but core inflation remained steady at 3.3%. The Federal Reserve’s target is lower than this reading, which may complicate the Fed’s plan for easing interest rates.
US markets were largely unchanged after the release of the data, with the S&P 500 and Dow Jones Industrial Average rising just 0.02% and 0.11%, respectively. However, Bitcoin continued to set fresh records, briefly crossing $93,000.
Chipmaker AMD announced it will lay off 4% of its staff, citing a need to strengthen its position in artificial intelligence chip space dominated by Nvidia. Meanwhile, Wells Fargo urges caution on the “Trump trade,” suggesting that bets on companies and stocks tied to Trump’s campaign promises may not pay off.
The path forward for interest rates is uncertain due to the potential inflationary impact of Trump’s policies. The Fed’s easing plan may be slowed or halted if inflation rises again in a second Trump term, leading to the possibility of a “higher for longer” scenario.
In conclusion, the October inflation data sets the stage for a final rate cut in December, but the uncertainty surrounding Trump’s presidency and its potential impact on the economy is adding complexity to the Fed’s decision-making process.
Source: https://www.cnbc.com/2024/11/14/cnbc-daily-open-could-higher-for-longer-make-a-return-.html