Navigating the Inflation Conundrum: What Investors Need to Know

As the markets recover from the aftermath of the US elections, a new concern looms on the horizon – inflation. President-elect Donald Trump’s stance on tariffs, coupled with recent appointments of China hawks, has sparked fears of rising prices on imported goods and a potential surge in inflation rates.

Understanding the Consumer Price Index (CPI)

  • The CPI report for October will provide insights into the current inflation landscape.
  • In September, we saw a slight uptick in price rises, which was initially dismissed as a one-time occurrence.
  • Another increase in the CPI could fuel concerns about inflation spiraling out of control.

The Core CPI MoM figure is crucial for both the markets and the Federal Reserve (Fed). Projections indicate a 0.3% rise in October, mirroring the previous month’s data.

If the actual results meet or exceed expectations, we can expect the US Dollar to strengthen while putting pressure on Gold and Stocks. On the other hand, a lower-than-expected outcome could lead to profit-taking in the Greenback, boosting Gold and equities.

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