(Reuters) – U.S. consumer prices increased as expected in October, and progress towards low inflation has slowed since mid-year, which could result in fewer interest rate cuts from the Federal Reserve next year.
The consumer price index rose 0.2% for the fourth straight month, the Labor Department said on Wednesday. In the 12 months through October, the CPI advanced 2.6% after climbing 2.4% in September. The headline numbers were exactly as predicted by economists polled by Reuters and the up-tick in annual inflation also reflects last year’s low reading dropping out of the calculation.
CPI excluding food and energy increased 0.3% in October, rising by the same margin for the third consecutive month. In the 12 months through October, the so-called core CPI gained 3.3%. That followed a similar advance in September.
MARKET REACTION:
STOCKS: U.S. stock index futures turned 0.2% higher, pointing to a steady open on Wall Street BONDS: The 10-year U.S. Treasury yield fell to 4.378% and the two-year yield fell to 4.273%FOREX: The dollar index softened more, off 0.2% and the euro was up 0.16%, a bit firmer
COMMENTS:
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN
“The numbers came in consistent with expectations, but under the hood there are signs of further improvement ahead. Durable goods prices are down 2.5% year-over-year. Nondurables are down 0.5%. Services inflation is still significantly positive, but it’s not accelerating any more. The inflation risks on the horizon from possible tariffs, deficits, or immigration changes are nebulous and uncertain enough to not be a major worry until we get more details about what might happen.”
(Compiled by the Global Finance & Markets Breaking News team)
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