The US October Consumer Price Index (CPI) surprised to the upside, coming in at a headline rate of +0.9% month-on-month and +6.2% year-on-year.
10 November 2021
Given the obvious inflation on the ground, perhaps the market should have been better prepared for inflation to outpace the +0.6% consensus estimate. This has become a more than transient issue now for markets still hanging on the dovish rhetoric coming from the Federal Reserve (Fed). Much of the increase came in the form of rising energy costs over the month. This might be more temporary than some expect but the dovish telegraphing from the Fed will continue to be called into question as long as inflation prints remain high by historic standards. The longer inflation holds, the more it becomes entrenched into consumer behaviour.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.