Analysis: More investors may believe that the Fed will cut interest rates by 25 basis points in November and December as planned

According to reports, there may be some upside risks to the US September CPI data next Thursday, especially the core CPI. According to the preliminary value of the S P Global Purchasing Managers' Index, corporate purchasing prices rose at the fastest pace in six months. Although the ISM manufacturing survey showed a decline, non-manufacturing reports confirmed the acceleration of price pressures. Therefore, if the data shows some stickiness in inflation, more investors may believe that the Fed will proceed as planned and cut interest rates by 25 basis points in November and December.

 

Jim Baird, Chief Investment Officer of Plante Moran Financial Advisors, said, "After a series of relatively weak employment data in the summer, the September employment report was exactly what the Fed wanted. It broke recent trends and provided optimistic reasons for the labor market to remain resilient." He added that although the report will not change the economic outlook, it should ease any concerns of investors or the Fed about the labor market. Earlier this week, Fed Chairperson Powell said he did not want to see further weakness in the labor market. One of the main reasons for the Fed's decision to cut interest rates by 50 basis points last month was the slowdown in hiring and the rise in unemployment earlier this year.