Macro Report

**Flash Report – October Consumer Price Index (CPI)**


This morning, CPI came in below the median forecast on Bloomberg. A welcome sign of continued relief from rising prices after recent indicators and reports have been pointing to sticky prices.


The YoY US consumer price index remained unchanged for October, staying at 3.2%, when expected an increase to 3.4%.

The MoM Core CPI (ex. food and energy) decreased to 0.2%, below market expectations and September’s print of a 0.3% increase. The YoY rate slowed to 4% – this is the slowest increase since September 2021 and below the expectations of 4.1%.

This slower than expected CPI growth bolstered view that the Fed’s rate hikes are done, causing Treasury yields to plunge.

  • Shorter-maturity Treasury yields led the decline, falling at least 20 basis points.
  • 10-year note’s yield fell by 19 basis point to 45, the lowest level since September.
  • 30-year bond’s yield fell 14 basis points to 65%. It also pulled forward market expectations for when the FED will pivot and start cutting rates.
  • Swaps contracts indicate the effective funds rate will fall to nearly 33% by December 2024 from 5.33% currently, a full 100 bps cut.

October Headline (dotted) and Core (solid) CPI

Breakdown of CPI Components