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Market Mood

The focus remains on U.S. inflation and interest rate policy as the Federal Open Market Committee (FOMC) prepares for its next meeting. September's core CPI data, expected to remain steady at 0.3%, could lower expectations for a rate cut in November. When viewed through the lens of the Fed’s preferred inflation gauge, core PCE, progress toward the 2% target is likely. However, some Fed officials might be reconsidering the decision to cut rates by 50 basis points in September. This week's FOMC minutes may reflect a more hawkish stance, suggesting the economy remains strong with little evidence of labor market weakness. That said, statistical factors may have skewed September's robust jobs report, and upcoming October payroll data could show a softer labor market, supporting the forecast of a 25-basis-point cut by November.

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