Why the US inflation index and Fed signals are attracting market attention

Recent uncertainties surrounding the U.S. economy are expanding. The government shutdown, a weakened labor market, and movements to reassess the valuation of AI assets are all contributing to heightened risk aversion among investors. In this context, the market is becoming more sensitive to the release of U.S. inflation data and signals from the Federal Reserve’s monetary policy. According to PANews, there is also a possibility that the schedule for economic indicator releases may be delayed due to government operational issues, increasing investor interest.

Statements from High-Risk Federal Reserve Officials

Key officials of the U.S. Federal Reserve are sending monetary policy signals to the financial markets. Chairman of the New York Federal Reserve and FOMC permanent voting member Williams is expected to share his views on the economic outlook, while Philadelphia Fed President Posen is anticipated to explain the relationship between financial technology and monetary policy. Additionally, FOMC voting members such as Atlanta Fed President Bostic, St. Louis Fed President Mueser, Cleveland Fed President Harker, and Kansas City Fed President Shrum will sequentially express their positions on economic outlooks and interest rate policies. These statements are interpreted as important signals that hint at the Fed’s future direction regarding rate hikes or cuts.

U.S. Inflation and Employment Data Drive Market Sentiment

Particularly noteworthy is the upcoming release of U.S. inflation data. The unadjusted October CPI and core CPI annual growth rates, as well as the monthly changes in seasonally adjusted CPI and core CPI, are scheduled to be announced. These figures are critical benchmarks for determining the Fed’s future interest rate policy. At the same time, new unemployment claims will also be released, providing insights into the health of the labor market. If U.S. inflation exceeds expectations, additional rate hikes may be anticipated; if it falls short, a continued easing trend could be implied.

Concerns Over Increased Volatility in Gold and Risk Assets

The possibility of delays in economic data releases due to the government shutdown is heightening market uncertainty. Typically, delays in key economic indicators like inflation data tend to increase demand for safe-haven assets such as gold and expand volatility in risk assets. Analysts are forecasting that over the coming weeks, markets may struggle to find direction amid economic data ambiguities and conflicting signals from the Fed.