What the future holds

New economic data shows some signs that the beast that is inflation might be beginning to be tamed.

• One of the key metrics used by the Fed to measure inflation rose lower than expected in October. Core PCE price only rose by 0.2% last month despite predictions of a 0.3% rise. Spending also rose in line with predictions of 0.8%, which some believe is an indication that inflation might be beginning to stabilize.
• There was a whole load of other economic data released as well, including personal income which jumped by 0.7% over October ahead of estimates of 0.4%, and jobless claims which fell by 16k over the period to 225k. On top of that, PMI data showed US manufacturing contracted in October for the first time since June 2020.
• The dollar index has been dropping after Jerome Powell’s comments that rate hikes will be slowed – falling to its lowest level since August. It’s been good news for the Japanese yen and sterling, which are up 3.8% and 1.55% respectively against the dollar since the start of the week. That being said, the dollar index has still risen by 8.63% since the start of the year.