Market Talk: US Inflation, The Federal Reserve, and Trump’s response.
Nothing much on today’s news since the market is still muted ahead of the US-Russia summit on Friday.
The US Inflation headline printed a softer cost pressure on consumption, which showed a growing appetite for the September rate cut, and that surged from 88% before the data release to 94.2% after the data release. The US Treasury Secretary Bessent opted to have a 50 bps rate cut in September, which is higher than the 25 bps the market mostly priced in. So this so-called repricing, paired with “no tariff on gold,” has given a chance for the gold to pave its way up, albeit not that much.
The primary problem we see is that the core CPI annually, which could possibly come from the shelter—the stickiest one—has increased higher than the prior figure and could become a bumpy road to achieving the target rate within the timeframe.
After the CPI was released, Trump also called out Goldman Sachs for being wrong on the tariff inflation problem. He reiterated that, even with post-tariff implementation, inflation hasn’t affected consumption except for foreigners, the government, and companies.
Other than that, Trump is also considering preparing a major lawsuit against the Federal Reserve Chair Powell over the construction of the FED building. Even if Trump said that he won’t fire Powell, he has been urging to fight against Powell for not lowering the interest rate as he suggested.
