On Tuesday (Oct 25), the sub-session, rose, temporarily traded at 111.99, or 0.10%.
The analysis points out that, influenced by the high stickiness of inflation, the aggressive interest rate increase will continue to suppress inflation expectations, and the probability of November and December is expected to be 75BP+50BP.
Although US inflation has been falling continuously since June, from 9.1% to 8.2%, the rate of decline has been very slow, resulting in inflation readings repeatedly exceeding expectations and the Fed‘s continued aggressive interest rate hikes to suppress inflation expectations.
September’s inflation overshoot was mainly due to core services inflation, including rent, remaining high. The downward trend of inflation is expected to remain unchanged, but it remains highly sticky and is expected to remain above 7% until the end of 2022.
The high stickiness of inflation leads the Fed to raise interest rates hawkish in the short term. Analysts expect two interest rate hikes after 2022, respectively 75BP and 50BP. The relative decline of interest rate hikes in December is mainly due to the confirmation of the downward trend of inflation and the continuing fermentation of recession expectations.
The dollar index remained hovering around 111.85, falling to session lows, while struggling to extend gains made at the start of the week in Asia on Tuesday.
