U.S. CPI for the month of September will be published today. The consensus estimate is a 3.6% increase YoY, but the last data point, for the month of August, surprised to the upside and the last two reports have shown an increase in inflation growth rates, breaking the downward trend since July ‘22. Additionally, this week the PPI report showed a 2.2% YOY increase, 0.6% higher than expected and core PPI increased even more, a 2.7%. The bulk of that increase is due to crude oil, which has spiked up due to OPEC production cuts and, since Saturday, it will probably find additional strength due to the conflict in Israel. The ECB has announced it may have concluded its hiking cycle, and now the question is if the Fed will do the same, and will simply maintain current high rates or if they will tighten more due to the inflation spike. The answer may not be that much related to price increases but first, to unemployment and second , to the health of the banking system in the U.S. the next FOMC meeting will take place in three weeks.
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