As expected, the core inflation rate remained elevated, increasing by 0.1% to reach 5.6%. The surge was mainly driven by services, excluding energy, which continued to remain at peak levels. It's worth noting that the core inflation rate has now surpassed the headline inflation rate, putting pressure on the Federal Reserve to maintain high interest rates to address the persistent core inflation. Given the upcoming economic indicators, it's still possible that the Fed will implement another rate hike. Initially, the futures market witnessed a surge of around 1% in equity indices. However, once the market opened, the gains were largely reversed, and some equities even slipped into the red. Recessionary sectors such as healthcare showed an upward trend, while the consumer discretionary sector felt the impact of the CPI figure. The possibility of sustained high interest rates holds greater significance than the likelihood of multiple rate hikes by the Fed.
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Eurozone sees lower than expected growth
Eurozone sees lower than expected growth