According to the latest data released by the US Bureau of Labor Statistics, consumer prices slowed down in September as energy prices decreased compared to the previous month.
On Thursday (October 12th), the Consumer Price Index (CPI) showed that the inflation rate in September increased by 0.4% compared to the previous month and 3.7% compared to the same period last year, slowing down from the 0.6% month on month increase in August, but comparable to the 3.7% annual price increase in August.
Both indicators are slightly higher than economists' forecasts of a month on month growth of 0.3% and an annual growth of 3.6%.
Excluding volatile food and natural gas costs, on a "core" basis, the US core CPI recorded an annual rate of 4.1% in September, which was slower than the 4.3% annual growth rate in August. It is the smallest increase since September 2021 and has been declining for six consecutive months. The monthly core price increased by 0.3%, unchanged from August. These two indicators also meet economists' expectations.
CME "Federal Reserve Observation": The probability of the Federal Reserve maintaining interest rates unchanged in the 5.25% -5.50% range in November is 93.6%, and the probability of raising interest rates by 25 basis points to the 5.50% -5.75% range is 6.4%. The probability of maintaining interest rates unchanged by December is 64.4%, the probability of a cumulative 25 basis point increase is 33.6%, and the probability of a cumulative 50 basis point increase is 2.0%.
Market response
After the data was released, spot gold fell by $9 in the short term to below $1875 and is now trading at $1979.62 per ounce.
COMEX's most active gold futures contract was traded in 6750 trades within four minutes from 20:30 to 20:34 Beijing time on October 12, with a total value of $1.269 billion.
Institutional review
Inflation in the United States slowed down in September, but still too fast for the Federal Reserve
Institutional review of US CPI data: The US Department of Labor stated on Thursday that the rise in US consumer prices slowed down in September, with a 0.4% month on month increase compared to August. The CPI report increases the risk of the Federal Reserve raising interest rates again.
The US CPI has risen rapidly for the second consecutive month
The US consumer price index rose rapidly for the second consecutive month in September, highlighting the intention of the Federal Reserve to maintain higher interest rates for a longer period of time. The released data shows that the core CPI index, excluding food and energy costs, rose 0.3% last month. Economists believe that core indicators can better reflect potential inflation than overall CPI. Some analysts believe that recent inflation data highlights how a strong job market can support consumer demand, which may keep price pressures above the Federal Reserve's target. It is currently unclear whether this will make the central bank inclined to raise interest rates again this year, especially considering the recent surge in bond yields, which some officials suggest may replace more tightening policies. But at least it supports policymakers' desire to maintain high borrowing costs for a period of time.
CPI data indicates the difficulty of fighting inflation in the last mile
Jay Bryson, Chief Economist of Wells Fargo, said that achieving the last mile of 2% inflation is difficult. He added that this is why the Federal Reserve will continue to tighten for a considerable period of time.