STOCK EXCHANGE: Wall Street opened to a decline – Chief strategist Lippo Suominen on inflation figures: “Wet rag”

In the United States, the stock indices describing the price development of shares were at a lower level compared to yesterday’s closing numbers when trading started on Thursday.

The S&P 500, which tracks large American companies, was down 0.2 percent at the time of writing. The Dow Jones, which follows thirty large companies, was down 0.1 percent and the technology-focused Nasdaq was down 0.3 percent.

Today, investors got fresh inflation figures from the United States to chew on, on the basis of which they try to estimate the Fed’s future interest rate cuts.

The prices of the two-year bond in the United States started to rise after the publication of the figures, i.e. the market interest rates fell. This suggests that investors do not believe the Fed will cut interest rates as strongly as previously estimated.

Lippo Suominen: Wet rag

According to the United States Department of Labor, consumer prices rose 2.4 percent in September from a year ago.

Information service Bloomberg’s the median of forecasts collected from economists expected the consumer price index to rise by 2.3 percent. The index rose by 2.5 percent in August.

The basic price index rose by 3.3 percent in the United States in September. Economists’ median forecast showed the same figure as in August, i.e. 3.2 percent.

“The US inflation figures were a wet rag for those waiting for interest rate cuts. Inflation was faster than expected across the board. The Fed still has to think about its interest rate path. Was September’s 0.5 percentage point drop too big”, OP: lla working chief strategist Lippo Suominen ponders on Twitter.

The bank’s senior market economist Jari Hännikäinen commented in the OP’s email that the bank is changing its view on the Fed’s rate cut cycle.

“We now expect the interest rate cut cycle to continue in November with the usual 0.25 percentage point interest rate cut, instead of the large 0.5 percentage point rate cut we previously anticipated.”