J.P. Morgan: US inflation data is good news for the Fed and equity markets

J.P. Morgan: US inflation data is good news for the Fed and equity markets

November 14, 2022

Inflation United States
Inflatie (02)

October’s US inflation print surprised to the downside. Both headline and core inflation came in below estimates at 7.7% y/y and 6.3% y/y respectively.

While there are still areas to watch: shelter costs continue to rise, and fuel oil costs rose by 20% m/m with potential knock-on effects via transport to food prices, this print is positive news for markets. Crucially it gives the Federal Reserve (Fed) room to slow the pace of their rate hikes. If inflation continues to moderate, we expect the Fed to continue raising rates to around 5% but potentially then pause to assess the effect that their recent rapid monetary policy tightening is having on the economy.

14112022 J.P. Morgan AM

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