All eyes are on the highly anticipated US CPI data due later Wednesday to gauge whether the Federal Reserve will continue its interest rate cutting path after December.
Economists expect the annual CPI and core CPI to rise by 2.6% and 3.3% in October, respectively.
Meanwhile, CPI and core CPI inflation are likely to remain unchanged at 0.2% and 0.3% on a monthly basis in the reported period.
A negative surprise in the CPI and core CPI readings is set to reinforce dovish expectations surrounding the Fed’s path to rate cuts.
Conversely, a hotter-than-expected inflation report may add to market expectations that the Fed may reconsider interest rate cuts in the future.
Any reaction to the US CPI data may be short-lived, as markets will shift their focus to Federal Reserve Chair Jerome Powell’s speech on Thursday.
Powell is scheduled to speak about the global perspective at an event hosted by the Federal Reserve Bank of Dallas.
Meanwhile, a new series of speeches from Fed policymakers will also be closely scrutinized.
Minneapolis Fed President Neel Kashkari and Dallas Fed President Lori K. Logan, Kansas City Chief Jeffrey Schmid and their St. Louis counterpart Alberto Musalem later in US trading on Wednesday.
