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US September CPI of 3.7% slightly exceeds market forecast, slowdown is evident “Interest rates likely to be frozen in November”

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The U.S. consumer price index (CPI) growth rate in September was 3.7% compared to the previous year, slightly exceeding the market forecast (3.6%), but it appeared to continue to slow. The market believed that the U.S. Federal Reserve (Fed) would likely keep interest rates unchanged in November, and the New York Stock Exchange futures continued to rise immediately after the CPI announcement.

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On the 12th (local time), the U.S. Department of Labor announced that the CPI in September was 3.7% compared to the previous year and 0.4% compared to the previous month. This is a slowdown compared to 4.3% and 0.6% in August. Although it was slightly higher than the market forecast (3.6%, 0.3%), this appears to have been mainly due to the rise in gasoline prices due to the rise in international oil prices.

The core CPI increase rate, excluding highly volatile foodstuffs and energy, was 4.1%, in line with market expectations and slowing down from 4.3% in the previous month. The core CPI increase rate compared to the previous month was 0.3%, the same as the August figure. The U.S. Department of Labor said, “Housing costs were the item that contributed the most, accounting for half of the increase in CPI,” and added, “The rise in gasoline prices also led to an increase in the overall item index.” Housing costs increased by 7.2% and gasoline prices by 3.0% compared to the previous year.

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The number of U.S. unemployment claims announced on this day from the 1st to the 7th was 209,000, similar to last week’s number of 207,000. It appeared to be slightly lower than market expectations.

As the U.S. CPI growth rate was almost in line with expectations and appeared to have slowed compared to the previous month, the possibility of the Federal Reserve raising interest rates further at the Federal Open Market Committee (FOMC) regular meeting in November has decreased. Recently, high-ranking officials at the Federal Reserve have been giving signals that seem to rule out further interest rate hikes, saying, ‘The recent surge in U.S. Treasury yields has the effect of raising the base rate.’ Some interpreted it as a ‘pivot’, which means the cycle of increase, if not an interest rate cut, has ended. The market, which has lessened the fear of additional interest rate hikes, is stabilizing, with the sharp rise in government bond yields subsiding and the stock market continuing its upward trend despite the war between Israel and Hamas.

The minutes of the September FOMC regular meeting released the previous day showed that while most FOMC members insisted on further increases, some said, ‘There is no need to raise interest rates any more.’ This means that opinions within the Federal Reserve are conflicting. city

According to FedWatch of the Cargo Commodity Exchange, interest rate futures investors assessed the likelihood of interest rates being frozen in November immediately after the CPI announcement today at about 95%, and predicted the likelihood of a freeze in December at around 60%. The possibility of an increase in December was reflected at around 40%.

New York =

Source: Donga

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