Today, the Bureau of Labor Statistics will release the latest inflation data. For the month of October 2022, the CPI data are scheduled to be released on November 10, 2022, at 8:30 A.M. Eastern Time. The October inflation figures will be closely watched by economists, analysts, and investors to see if there has been any impact of rate hikes on price rises. On November 10, the US Fed hiked rates by 75 basis points taking the total magnitude to 375 bps in 2022 so far.

Also Read (Post US CPI Release) : US CPI data shows inflation rate cooling more than forecast to 7.7% in October

Between May and September, this is how US inflation changed. The US inflation rate increased from 8.6% in May to 9.1% in June, then dropped to 8.5% in July, further decreased to 8.3% in August 2022, and finally settled to 8.2% in September 2022.

US Fed is adamant to bring inflation under 2%, primarily by raising borrowing costs and disincentivizing the creation of new jobs. Understandably, the impact of rate hikes on the economy comes with a lag. Still, the core-inflation data will be crucial to look at before concluding any meaningful decline in the inflation numbers.

Most Wall Street stakeholders are predicting that the CPI would have grown by 7.9% or 8% annually in October, down from 8.2% annually in September. It is anticipated that the core CPI, which excludes the volatile food and energy components, increased by 6.6% year over year, the same rate as in September.

“Experts in the market anticipate that CPI for October will hover at an annual 7.9 percent, which is a minuscule deviation from the 8.2 percent YoY increase in September. Conjectures for the core CPI are at around 6.5 percent against 6.6 percent in September. Investors are hoping for an easing of monetary measures from the Federal Reserve in December,” says Kunal Sawhney, CEO of Kalkine Group.

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Q3 GDP growth rate had increased and even the job sector is looking robust, giving the Fed actions little room to rejoice. What is becoming clear is that the terminal rate may breach 5% levels if the inflation remains sticky and doesn’t show signs of cooling down from here on. Inflation has been seen to fall over the last 2-3 months but coming down of the annual pace of price rise by a larger magnitude could be pivotal which the markets could be waiting for.