The US Consumer Price Index (CPI) data for October has been published, which is an important economic indicator for global investors. Like every month, this data shows the direction in which the US economy is going and this affects the decisions of investors around the world. In this article, let us understand in detail what the October CPI data means, what are the expectations for the upcoming meeting of the US central bank Fed, and what impact they may have on global markets.
CPI data for October 2024: At a glance
The Consumer Price Index (CPI) has increased by 2.6% annually in October. This is slightly higher than September, where the increase was 2.4%. Let us know what is the importance of this data:
What is CPI?
CPI is an economic indicator that shows the change in the average price of goods and services purchased by consumers. This index measures the rate of inflation, and it shows how expensive it has become for the common man to live.
Changes in October CPI
- Index of all goods: Increased 2.6% in 12 months.
- Index except food and energy: An increase of 3.3% was seen.
This data shows that the prices of basic consumer clothing and services are also increasing, especially without energy and food products.
Fed’s next meeting: What can happen?
After the October CPI data came out, all eyes are on the next meeting of the US Federal Reserve. The Fed is scheduled to meet on 17-18 December 2024, and this meeting can determine the direction of whether interest rates will be cut further or not.
Impact on Fed policy
The Fed has cut interest rates in the last few months. In September, there was a cut of 50 basis points, and in November this cut was of 25 basis points. Now the question arises whether the Fed will cut interest rates further in December or not?
Rate cuts made by the US Fed
- September 2024: 50 basis point cut.
- November 2024: 25 basis point cut.
- December 2024 meeting: The market expects that the Fed may cut interest rates further.
The question here arises whether Trump’s tax cuts and trade tariffs can increase inflation, and will it affect the Fed’s rate policy?
US Elections 2024 and its impact
Donald Trump is likely to be sworn in as President in January next year. It will be interesting to see what effect this will have on the US and global markets. Trump’s policies are especially known for tax cuts and trade tariffs, which can affect inflation.
Impact of Trump’s policies
- Tax cuts: This can bring stimulus to the US economy, but it can increase inflation.
- Tariffs: Trade tariffs can increase the prices of imported textiles, which will put pressure on inflation.
It remains to be seen what effect these policies have after Trump becomes president.
Impact on markets: What is happening?
The US stock market has shown some positive trends after the October CPI data and the Fed’s rate cut.
Status of the US stock market
- S&P 500 and Nasdaq 100 have seen an increase of up to 30% in the last 12 months.
- Dow 30 has also increased by 26%.
It is clear from these figures that the US market has given good results recently, but it remains to be seen what will be the effect of this “Santa Claus Rally” before Trump’s arrival.
What to learn for global investors?
Investment prospects
If you are a global investor, then this may be the time to take important decisions. It is necessary to pay attention to the Fed’s policy and the US economic indicators.
- Monitoring interest rates: Changes in the Fed’s policy can affect your investment.
- Stock market: The US stock market has risen in the last few months, but there may be a change in the coming time.
- Inflation effect: Pay attention to the rising inflation rate in the US, as it can affect the prices of various goods and services.
Future indications
The results of the Fed meeting in December, the impact of Trump’s policies, and the results of the US elections can have a huge impact on the global markets. Global investors should keep an eye on all these indicators so that they can make the right investment decisions.
Conclusion
The CPI data for October 2024 and the upcoming Fed meeting are important indicators for global investors. Only by understanding these signals can we correctly predict future economic trends. The US markets are seeing a good rise at the moment, but various factors can affect these markets in the coming months. Therefore, the investor should be cautious and take the right decision.
Frequently Asked Questions (FAQs)
1. Why is the CPI data for October 2024 important?
The CPI data for October serves as an indicator of inflation and shows the direction in which the US economy is headed.
2. What will be the impact of the Fed’s rate cut on investment?
The Fed’s rate cut can make borrowing cheaper, making it easier for investors to invest in some sectors There could be an opportunity for profit.
3. What impact will the US election have on the markets?
Trump becoming president may lead to a change in US policies, which may affect the stock market and inflation.
4. What is the “Santa Claus Rally”?
The “Santa Claus Rally” is the general positive increase in the US stock market in December, which occurs near the end of the year.
5. What should global investors do?
Global investors should pay attention to US economic indicators and the Fed’s rate policy, so that they can make the right investment decisions.