After Trump's election victory, the market's sensitivity to CPI may increase
According to foreign media analysis reports, one of the main points in Federal Reserve Chairman Powell's speech in Jackson Hole in August was that given significant progress on inflation, the Fed's response is no longer solely focused on inflation. There are clear signs that employment has become a more important factor in determining policy. Subsequently, employment data caused greater cross-asset volatility over recent months.
However, with Trump achieving a decisive victory and more importantly, the possibility of a sweeping Republican win, market sensitivity to inflation data may rise again. The prospect of implementing protectionist policies through trade tariffs and expansionary fiscal policies could complicate the anti-inflation process. The market has repriced higher terminal interest rates for the Fed from 3.6% to 3.75%.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Institutions: Powell offers little new guidance on rate cuts
Powell: Unemployment rate has fallen in past three months, remains low
Dollar index DXY briefly up 20 pips at 104.66
Capitol Macro: Today's Fed rate resolution is hawkish