Inflationary pressures continue to weigh on not only the U.S economy but across the world. Consumer price index or CPI showed an increase of about .4% from August to September, boosting the yearly inflation to around 8.2%. While this is down from the June peak of about 9%, we are sitting around 40-year highs. CORE consumer price index, which excludes food and energy, rose even further to about .6% higher than the previous month.
The reaction to this news was substantial. Stock market futures initially fell while treasury yields skyrocketed with the anticipation of even greater rate hikes ahead from the Federal Reserve. Markets reversed their morning reaction and rebounded to show a near 1000-point gain for the Dow Jones. There is a clear commitment from the Federal Reserve to obtain the price stability that all consumers seek. A fourth consecutive .75% rate hike is likely for November 2nd, which will continue to move the needle on cooling prices.
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