Midweek Update: Key Developments and Market Insights [11th September 2024]

The markets are eagerly awaiting the release of the Consumer Price Index (CPI) data, while political attention has shifted to the debate between Donald Trump and Kamala Harris. Their differing views on key economic issues like tariffs on China, immigration, and inflation were central to the debate. Harris sees Trump’s proposal of a 60% tariff on Chinese goods as a potential obstacle to the Federal Reserve's inflation control efforts. Markets have reacted slightly, with Harris's odds improving to 55%.

Meanwhile, futures markets predict a 65% chance of a 25-basis point Fed rate cut after next week's policy meeting, with a 35% chance for a larger 50-basis point cut. Economists forecast a drop in headline CPI to 2.6%, while core inflation is expected to stay steady at 3.2%. This CPI data is key to determining the Fed’s rate cut size.

Gold prices have surged toward $2,525, driven by lower US Treasury yields and rate cut expectations. Declining oil prices, now at $66 per barrel, also offer potential relief to inflation pressures. Lower oil prices are expected to ease inflation, support central bank policies, and boost global economic sentiment.

For a more detailed analysis of this week's economic indicators, visit our website: Read More Here.