The statement made by Federal Reserve officials in October was intended to correct the market's bets on a series of rapid interest rate hikes, but the inflation data did not cool down as expected. The US Department of Labor released a report on Tuesday showing that excluding the core CPI of food and energy, the three-month annualized increase to October reached 3.7%. Compared with the 1.6% growth rate in the first three months of July, inflation has fully rebounded. This set of data almost confirms that the Federal Reserve will raise interest rates during the December 8-9 interest rate meeting. The greater disagreement is how fast the Federal Reserve should tighten its policy, whether to continue to raise interest rates only 2 to 3 times as anticipated by many officials, or whether to start a longer cycle of austerity to slow down the economy and reduce inflation. Pinhao economist Tiffany Wilding said that the rise in core prices last month occurred not only in categories that are easily affected by the transmission of tariffs, energy, and shipping costs, but also in areas less affected by these factors, such as housing, entertainment, and other non-transportation services. Wilding said that the current situation is not the same as the one where inflation peaked at 9% year on year in 2022, but “this inflation report is very disappointing for the Federal Reserve.”

The statement made by Federal Reserve officials in October was intended to correct the market's bets on a series of rapid interest rate hikes, but the inflation data did not cool down as expected. The US Department of Labor released a report on Tuesday showing that excluding the core CPI of food and energy, the three-month annualized increase to October reached 3.7%. Compared with the 1.6% growth rate in the first three months of July, inflation has fully rebounded. This set of data almost confirms that the Federal Reserve will raise interest rates during the December 8-9 interest rate meeting. The greater disagreement is how fast the Federal Reserve should tighten its policy, whether to continue to raise interest rates only 2 to 3 times as anticipated by many officials, or whether to start a longer cycle of austerity to slow down the economy and reduce inflation. Pinhao economist Tiffany Wilding said that the rise in core prices last month occurred not only in categories that are easily affected by the transmission of tariffs, energy, and shipping costs, but also in areas less affected by these factors, such as housing, entertainment, and other non-transportation services. Wilding said that the current situation is not the same as the one where inflation peaked at 9% year on year in 2022, but “this inflation report is very disappointing for the Federal Reserve.”