Federal Reserve Chairman Powell attended a press conference after the two-day Federal Open Market Committee interest rate policy meeting on November 7, 2024 in Washington, the United States.
Annabel Gordon | Reuters
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What you need to know today
U.S. inflation picks up
this overall inflation The US interest rate in October was 2.6%, in line with market expectations. Core inflation, which excludes food and energy prices, was steady at 3.3%. The overall data was above the Fed’s target, which could complicate the Fed’s easing path.
The market changed little after the inflation data was released
After the release of October inflation data, most US markets fluctuated within a narrow range, with the S&P 500 Index and the Dow Jones Industrial Average rising only 0.02% and 0.11% respectively. The Nasdaq closed down 0.26% on the day. Across the Atlantic, the pan-European Stoxx 600 index fell 0.13%.
Bitcoin continues to set new records
Bitcoin continued to hit new records on Wednesday, briefly topping the $93,000 mark as traders assessed October inflation data. The cryptocurrency rose to a new record of $93,469.08 before giving back some of its gains to end up at $90,476, According to coin indicators. Trump has taken a pro-cryptocurrency stance during his campaign, pledging to make the United States the “cryptocurrency capital of the earth.”
AMD announces layoffs
Chipmaker AMD will cut 4% of its workforce, or about 1,000 employees, as it attempts to solidify its position in the artificial intelligence chip field currently dominated by Nvidia. The company had 26,000 employees at the end of last year, according to SEC filings. AMD is the second largest graphics processing unit (GPU) manufacturer after Nvidia.
(PRO) Wells Fargo urges caution on Trump trade
Wells Fargo Investment Institute said Wall Street has been pouring money into so-called “Trump trades,” investing in companies and stocks tied to Trump’s campaign promises, but that doesn’t mean those bets will pay off.
bottom line
Shakespeare famously said: “The world is a stage, and all men and women are but actors; they have exits and entrances, and one man plays many parts in his time.”
With October inflation data in line with expectations, the stage seems set for a final rate cut in December, which will bring the federal funds rate to the central bank’s so-called target of 4.25% to 4.5%. “Bitmap” will be released in September.
It is worth noting that October’s data was the first time since March that overall inflation rose, with the 2.6% figure above the Fed’s 2% target.
Therefore, the path to 2025 is currently less clear.
Well, the person who has to play many roles is Fed Chairman Jerome Powell. Returning to the “dot plot”, the Federal Reserve in September predicted that it would cut interest rates by another 100 basis points by the end of 2025 and by another 50 basis points by the end of 2026.
However, as economists say, Trump’s policies, if implemented, could stoke inflation, and with Republicans expected to win a trifecta – control of the president, Senate and House of Representatives – the more likely he is to deliver on his promises. Come bigger.
This means that if inflation rises again during Trump’s second term, the Fed may be forced to slow or stop easing policy. In short, the term “higher and longer” may come up again.
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