Will the Fed pause its rate cuts?

Stock Senior joined discussion · Oct 10, 2024 19:42

Before the release of the non-farm payrolls data last Friday, perhaps few people would have thought that tonight's US CPI data would have much impact on the market. However, everything has changed significantly now...

With the Fed's focus on employment data, inflation data may no longer determine whether the Fed will cut interest rates by 25 basis points or 50 basis points at a certain meeting, but inflation data still has a crucial voice in the topic of whether the Fed will continue to cut interest rates. Especially in the context of last week's non-farm payrolls not only showing that new employment far exceeded expectations, but also that wage growth was higher than expected, the Fed may still be unable to assert whether the "wage-inflation" spiral will revive!

Many industry insiders said that last week's non-farm payrolls report, which completely changed market expectations, has brought greater pressure to this week's US CPI data. If inflation data unexpectedly rises beyond expectations, it is likely to further reduce the market's expectations of the Fed's interest rate cuts before the end of the year, and then trigger another wave of market turmoil. This can be seen from the "emergence" of option volatility indicators...

The main risk points in the market are likely to focus on the core CPI data. The median of the current industry estimates shows that the year-on-year increase in the core CPI in September is likely to remain at 3.2% for the third consecutive month. While the overall CPI is falling, the core CPI has always been "sticking above 3%, which may bring considerable risks when the Federal Reserve has already cut interest rates by 50 basis points.

According to media surveys, the expected distribution of the core CPI month-on-month in September shows that the number of analysts who expect an increase of 0.2% and 0.3% is roughly the same, and there is only one economist (Jason Schenker of Prestige expects only an increase of 0.1%). Therefore, people today also need to be careful of the risk that the core month-on-month CPI will slightly exceed expectations. $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Apple (AAPL.US)$

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LittleSoldier : The data from unemployment is probably false, I expect a revised figure coming!

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Nicholas Low LittleSoldier : Good news will never be revised . Only when market reacts badly they need to revise

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LittleSoldier Nicholas Low : Just like the last unemployment numbers missing 800 + thousand jobs! What planet did you come from? So you believe everything the Gov tells you? I got some Swamp land you buy to, it’s beautiful

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105236546 :

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Nicholas Low LittleSoldier : I agree with u . I didn’t say numbers are real . Just saying that they don’t seem to revised numbers when market reacts well

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Stock Senior

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