Inflation Data - September US CPI was below expectations, with a month-on-month increase of +0.3% compared to the expected +0.4%[1] - Core CPI also underperformed, rising +0.2% month-on-month against an expectation of +0.3%[1] - Year-on-year CPI increased by 3.0%, slightly below the expected 3.1%[1] Housing Inflation - The Owner's Equivalent Rent (OER) component saw a significant drop from +0.38% to +0.13%, marking a new low since the pandemic[1] - Housing inflation's contribution to overall CPI was notably affected by this OER decline, which has a high weight of 26% in the CPI calculation[1] Market Trends - Major global stock indices rose due to better-than-expected corporate earnings and easing trade risk sentiment, with the S&P 500 and Nasdaq increasing by 1.9% and 2.3% respectively[1] - Gold prices fell sharply by over 5% due to profit-taking from previous highs, while WTI crude oil surged by 6.9% to $61.5 per barrel[1] Federal Reserve Outlook - Analysts expect the Federal Reserve to cut rates by 25 basis points in both October and December meetings, with the policy rate likely dropping to 3.75% by year-end[2] - The market is increasingly betting on consecutive rate cuts due to tightening liquidity conditions and ongoing regional bank risks[1] Economic Growth Projections - Analysts have revised the Q3 2025 US GDP growth forecast upwards to 2.8%, while slightly downgrading Q4 2025 and Q1 2026 projections[2] - The consensus for PCE year-on-year growth has been adjusted downwards, with Q3 2025 now expected at 2.7%[2] Risks - Potential risks include unexpected policy shifts from Trump, excessive rate cuts leading to inflation rebound, and prolonged high rates causing liquidity crises in the financial system[2]

Core Insights - The U.S. Personal Consumption Expenditures (PCE) price index rose by 0.3% month-on-month and 2.7% year-on-year in August, indicating a slight increase in inflation [1] - The core PCE price index, excluding food and energy, increased by 0.2% month-on-month and 2.9% year-on-year, aligning with market expectations [1] - Consumer spending and income data for August exceeded market expectations, with consumer spending rising by 0.6% and personal income increasing by 0.4% [1] Economic Indicators - Energy prices, including gasoline and electricity, rose by 0.8% month-on-month, while food prices increased by 0.5% [1] - The personal savings rate stood at 4.6% in August [1] Market Analysis - Analysts view the robust consumer spending data as a positive sign for the U.S. economy, indicating strong consumer demand [1] - Despite the slight uptick in inflation, economists do not expect it to impact the Federal Reserve's interest rate reduction plans [1] - The Federal Reserve recently lowered the federal funds rate target range by 25 basis points to between 4% and 4.25%, with potential for two more rate cuts this year [1]