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Will Friday’s US CPI Release Clarify Or Blur The Inflation Outlook?
Judging by the Treasury market, the delayed September update on consumer inflation due on Friday will keep the Federal Reserve on track to cut interest rates again next week. The policy-sensitive 2-year Treasury yield eased again on Tuesday (Oct. 21), falling to 3.46% and extending a downtrend that’s been unfolding for much of the year. Skepticism about rate cuts is in short supply in this corner. Fed funds futures are also fully on board with pricing in a high probability (97%) that the central bank will ease policy again at its Oct. 29 meeting. Friday’s scheduled update on consumer inflation, however, is on ... (full story)