Economics
U.S. inflation stayed subdued in September and October
Core PCE held at 3.1% and October CPI rose 0.3%, while China's annual inflation stayed near one percent.
On Wednesday, data showed U.S. Core PCE inflation remained at 3.10% year-over-year for September. The same day, October consumer-price index rose 0.3% month-on-month. Together with China's annual inflation of roughly one percent, the figures signaled subdued price growth.
The modest U.S. numbers kept expectations for a sharp equity rally low. In October the S&P 500 ETF never fell to the $710 low that had been watched.
Treasury yields also stayed restrained, as the 10-year note did not climb to 5.41% during the month. The yield ceiling remained below that level throughout October.
China's inflation reading for October, posted at 0.9%-1.0% year-over-year, aligned with the low-inflation environment elsewhere. The figure contrasted with earlier expectations of higher growth. It added to the global picture of temperate price dynamics.
Expectations for future bond-yield increases stayed modest. The data set a tone of caution for investors heading into the final weeks of 2026.
Analysis
Subdued inflation reduces pressure on the Federal Reserve to raise short-term rates, which in turn limits the upside potential for equities that often respond to aggressive monetary easing.
What this was built from
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