📉 Inflation Cools Down — Finally!
Fresh data from September shows that U.S. inflation fell below expectations across the board:
📊 CPI (YoY): 3.0%
📊 Core CPI (YoY): 3.0%
Both readings came in 0.1% lower than forecast, easing pressure on the Fed. With inflation cooling, policymakers can finally breathe a sigh of relief 😮💨 — and shift their attention from prices to jobs.
$🏠 What’s Driving the Decline?
The surprise slowdown came mainly from softer rent growth:
🏘️ Owners’ equivalent rent rose just 0.1%, far below expectations.
👕 Clothing increased 0.7% and 🚗 new cars rose 0.2%, but these were offset by falling used car and medical costs.
The much-discussed tariff effects have so far remained limited.
👷♂️ The Fed’s New Worry: Employment
While inflation eases, jobs are slipping.
In August, the U.S. added only 22,000 new jobs — a major miss.
The unemployment rate rose to 4.3%, the highest since November 2021 📉.
Fed Chair Jerome Powell has warned that the labor market is cooling fast — and this rate cut is seen as a preventive measure to stop further damage. 🛑
📈 Market Reaction: Instant Euphoria
Wall Street wasted no time:
🏛️ U.S. stocks surged, with the Nasdaq hitting a record high 🚀
🪙 Gold jumped, reflecting expectations of looser monetary policy.
But experts warn — ⚠️ don’t celebrate too early!
A leading securities analyst cautioned that U.S. tariffs could soon exceed 17%, bringing a delayed inflation shock later this year.
🕰️ Uncertainty Ahead
Due to the ongoing government shutdown, some official reports may be delayed, meaning next month’s CPI might not even be released on time. That could make policymaking even trickier for the Fed.