Higher-than-expected inflation in the US creates volatility in global markets
Following US September inflation rates exceeding expectations, expectations that the central bank will raise interest rates increased, and declines were experienced in stock market indices.
The Consumer Price Index in the United States exceeding projected levels in September triggered a general selling wave in global financial markets and drove up interest rate hike expectations.
Latest Status in US Inflation Data
In the United States, the Consumer Price Index increased by 0.6 percent on a monthly basis in September, following a course parallel to expectations.
Annual inflation reached 3.7 percent, coming in above market expectations and recording some of the highest rates of recent periods.
Impact of Inflation Items
According to the released data, monthly inflation reached its highest level in the last five months, and annual inflation in the last four months.
Gasoline prices showed a marked increase of 9.1 percent on a monthly basis in September, pulling the index upward.
Core Inflation Rates
During the evaluated period, core CPI registered a monthly increase of 0.3 percent.
Annual core inflation stood at 2.6 percent and was closely monitored by financial markets.
Fed's Interest Rate Policy Expectations
Richmond Fed President Tom Barkin and Chicago Fed President Austan Goolsbee made evaluations following the released data.
The probability of the Central Bank going for an interest rate hike in October in the markets rose from 22 percent to 73 percent with the incoming data.
Value Losses in New York Stock Exchange
US stock markets followed a negative course following the announced inflation data, and indices moved downward.
In the New York Stock Exchange, the Dow Jones lost 0.09 percent, the S&P 500 1.11 percent, and the Nasdaq 1.88 percent in value.
Global Markets and Borsa Istanbul
While European stock markets exhibited a positive outlook except for Italy, sharp declines were seen in Asian stock markets.
In Borsa Istanbul, the BIST 100 index completed the day with a 1.08 percent decline at 12,118.29 points.