U.S. Inflation was flat in October from the previous month, providing a positive sign that high prices are finally easing their tight grip on the U.S. economy. Is this also a green light for the Federal Reserve to stop raising interest rates.
The consumer price index (CPI) was flat in October 2023 from the previous month but up 3.2% from a year ago. Both were below analysts’ estimates, sparking a major stock market rally.
Excluding volatile food and energy prices, the core CPI rose 0.2% and 4%, against the forecast of 0.3% and 4.1%. The annual rate was the smallest increase since September 2021.
The flat reading on the headline CPI came as energy prices declined 2.5% for the month, offsetting a 0.3% increase in the food index.
Traders do not anticipate that the Fed will raise interest rates in December 2023, according to data from the CME Group.
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U.S. Treasury yields fall
U.S. Treasury yields fell on Tuesday 14th November 2023 as key inflation data showed a surprisingly ‘soft’ change in prices last month.
The 10-year Treasury yield fell to about 4.45%. The 2-year Treasury yield fell more to under 4.9%.
Good data
Inflation stabilising, yields falling and equities up – are the stars aligning for a stock market rally leading into Christmas 2023?