Wall Street forecasts announced ahead of US September inflation data
As markets focus on the US September CPI figures, a Wall Street Journal survey projects annual inflation to rise to 3.6 percent.
The Consumer Price Index data to be released in the US is of critical importance for investors and the central bank's monetary policy. According to a Wall Street Journal survey, monthly inflation is expected to be 0.6 percent and annual inflation 3.6 percent.
Inflation Data is the Focus of Markets
The most critical agenda item of the day in US markets is the September Consumer Price Index. The data to be released is closely watched regarding the interest rate policy that the US Federal Reserve will pursue for the remainder of the year.
Energy Impact on Headline Inflation
One of the main factors behind the expectation of an increase in headline inflation is energy prices. The average price of gasoline per gallon in the US exceeding $4.30 and setting a period record created upward pressure on the September CPI.
Expectation of a Slowdown in Core Inflation
Markets have turned their main focus to core inflation, which excludes volatile items such as food and energy. The monthly growth rate of the core CPI is expected to decline from 0.29 percent to 0.22 percent.
Banks' Inflation Forecasts
According to the survey conducted by the Wall Street Journal, the lowest monthly core forecast came from Deutsche Bank, while Goldman Sachs, Barclays, and Morgan Stanley project a 0.24 percent increase.
Impact on Gold, the Dollar, and Stock Markets
If core inflation comes in in line with expectations or lower, expectations regarding new interest rate hikes by the Fed could weaken. This situation could support gold and stock markets.
If the core CPI exceeds expectations, the expectation that tight monetary policy will continue may strengthen, and this scenario could create selling pressure on gold and stock markets.