The Federal Reserve just shocked the markets — U.S. inflatio
Arif Riaz 9892
Updated at: 3 hours ago
{"content":"The Federal Reserve just shocked the markets — U.S. inflation for September came in lower than expected, opening the door for a second interest rate cut this year.
📊 The data: CPI and Core CPI both rose 3% year-on-year, each 0.1% below expectations. That means inflation pressure has eased, and the Fed’s focus is now shifting from fighting inflation to protecting jobs.
🏠 The slowdown mainly came from weaker rent growth — owners’ equivalent rent rose only 0.1%, far less than forecast. Tariff impacts were mild: clothing rose 0.7%, new cars 0.2%, offset by price drops in used cars and medical care.
💼 But the concern now? Employment.
In August, only 22,000 new jobs were created, while the unemployment rate climbed to 4.3%, the highest since late 2021. Powell’s earlier warning that the labor market is cooling is now reality. The upcoming rate cut is preventive — aimed at stopping further job losses before they spread.
📈 Market reaction was immediate:
U.S. stocks surged, the Nasdaq hit record highs, and gold prices climbed. Yet analysts caution it’s too early to celebrate — tariff effects could still spark a delayed inflation wave. Some estimate the effective tariff rate may exceed 17%, which could reignite price pressures soon.
⚠️ Meanwhile, a government shutdown has delayed key data releases, meaning next month’s CPI may be missing — complicating the Fed’s decisions.
For now, one thing is clear: this upcoming rate cut is the Fed’s move to “prepare for a rainy day.” 🌧️
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