Inflation still needs to be controlled, with October CPI at 3.7% and CPI excluding food and energy rising to 2.6%. Energy prices have fallen since the beginning of the month, but the numbers still aren’t headed in the right direction. Still, this forces the Fed to act at its December meeting since the overall economy seems to be in good shape. The probability of a Fed hike has increased, and Fed Governor Waller now suggests a 50 bp increase may be necessary.
While the numbers were below consensus, inflation still suggests Fed action is necessary.
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