Fitch Ratings: Inflation data poses a warning to the Federal Reserve, and the end of month interest rate hike has entered the discussion range

Fitch Ratings' US Chief Economist Olu Sonora stated that the inflation report constitutes a red light warning for the Federal Reserve. Energy inflation has pushed up overall data, with core inflation still above 3%. Higher energy costs have infiltrated service prices, increasing the risk of sustained inflation. The end of month interest rate hike has entered the scope of discussion, and December is still the more likely time for action. (Source: Golden Ten Data) AI interpretation: Inflation data continues to rebound and core indicators remain high, directly breaking the market's illusion of a rapid decline in inflation. The transmission effect of energy prices has intensified inflationary pressures in the service industry, forcing the Federal Reserve to reassess the necessity of tightening policies. The resumption of interest rate hike discussions marks a shift in monetary policy towards a hawkish stance, and the market must reprice the risk of maintaining high interest rates for a longer period of time. This signal has completely put an end to the expectation of short-term interest rate cuts, and the financial environment will face significant pressure due to the expectation of policy tightening.