UBS: If CPI data does not meet expectations, the possibility of the Fed staying on hold will increase

UBS economist Brian Rose said in a report last Friday that September's CPI will be a key data point. If prices rise faster than expected, coupled with stronger labor data, the likelihood of the Fed staying on hold at the November meeting will increase. According to data from the CME FedWatch tool, after the release of the September employment report, the probability of the Fed cutting interest rates by 50 basis points next month fell from 33% to zero, and traders are now not even fully pricing in a 25 basis point rate cut. Therefore, the importance of Thursday's CPI reading to the Fed's next move has increased. (Jinshi)