October Inflation Data in the US Exceeds Expectations: Fed's Interest Rate Policy Questioned
The October inflation data released in the US, which came in above expectations, has triggered concerns that the Fed may increase the pace of its interest rate hikes. While bond yields saw a sharp rise, the possibility of a 50 basis point rate hike for December has come to the fore in the markets.
In the US, headline inflation for October rose by 0.4% monthly, while core inflation increased by 0.3%, exceeding expectations. These figures have strengthened market concerns that the Fed may accelerate its interest rate hike process.
Fed Board Member Christopher Waller stated that if core inflation comes in at 0.3% or higher, a 50 basis point interest rate hike should be considered in December. While markets currently view a 25 basis point hike as the base scenario for December, the probability of a 50 basis point hike has risen to 10%.
Following the inflation data, US two-year bond yields rose by 18 basis points, marking the sharpest daily increase since April 2025. As the dollar index climbed to 102.3, this rise in bond yields put pressure on gold and silver prices. While technology stocks on Wall Street faced selling pressure, a recovery trend was observed in Asian stock markets.
Sources
- paraanaliz.com · Link