Bloomberg Surveillance: US Inflation, Fed Rates, and Global Trade Tensions

US Inflation and Federal Reserve Policy

• 📉 The September CPI report showed underlying US inflation rose at the slowest pace in three months, supporting the Federal Reserve's trajectory to lower interest rates.
• 💡 David Kelly of JPMorgan Asset Management noted falling rental costs and used vehicle prices, and core goods prices outside food and energy being tame, suggesting retailers are absorbing tariff increases.
• ⚠️ Kelly cautioned that upcoming tax refunds could lead to increased consumer spending, potentially allowing retailers to pass on tariff costs in early next year, causing a temporary inflation spike.
• 📊 Kelly expressed concern that the Federal Reserve might be adding liquidity to already