The once sky-high inflation in the United States showed signs of cooling following the latest Consumer Price Index (CPI) data released today by the U.S. Bureau of Labor Statistics (BLS) . According to released figures, the CPI, which is a measure of the prices of goods and services, rose 0.4% in October and 7.7% from a year earlier.
This data is very impressive when compared to the 8.2% recorded in September and the 7.9% forecast by analysts polled by Dow Jones.
“It certainly shows how concerned the markets are about the consumer price index and want to use it if there is any help“said John Briggs of NatWest. “The Fed will slow down and peak rather than continue to aggressively raise rates 75 basis points at a time.”
The data sent a positive signal to investors, indicating that inflation in the United States has peaked, a good development for the economy in general. This fueled impressive growth in the stock market, with futures linked to the Dow Jones index rising 844 points, a growth of 2.6%. Futures linked to the S&P 500 jumped 3%, while futures linked to the Nasdaq 100 also saw growth of more than 3.7%.
The inflationary update and the Federal Reserve’s response kept the market down to a very large extent as access to credit to support business growth was significantly stiffened. Looking ahead to the pre-market, a good number of tech stocks posted notable gains in the early hours of trading on Thursday.
Meta is up 5.6% to $107.16, despite announcing the 13% cut of 11,000 of its employees earlier this week. Bitcoin and Ethereum are also leading the uptrend in the cryptocurrency market following this news.
While bitcoin pared its losses to trade at $17,521.29, Ethereum is up 8.46% at $1,331.05 at the time of writing.
US inflation and the expected response from the federal authorities
With the U.S. inflation figure having come down impressively, analysts expect the Federal Reserve’s Open Market Committee (FOMC) to no longer maintain its landmark 75 basis point interest rate hike. in the future.
“The question now is what we will hear from the Fed. This will determine how far the rally can go. A single data point is not enough to confirm this claim, but it does support the hypothesis [d’un pic d’inflation]“said Ben Jeffery of BMO.
As things stand, Federal Reserve officials, including Chairman Jerome Powell, have reaffirmed that they will continue to fight inflation until it is brought back to the benchmark level of 2 to 4 %. The numbers show that this stage is still a long way off and investors should keep an open mind about what to expect from the economic drivers at their next meeting.