Inflation remains above target, but it is slowing and fueling bets on easing monetary policy ahead. The CME’s FedWatch tool prices 95% odds of the Fed holding rates at the current 5.25%-5.5% range in December, up from 86% yesterday. A 25-basis point cut becomes the highest probability in May. October core annual CPI was 4%, slowing slightly from September’s 4.1%, while the Fed targets 2%.

AmeriVet’s Gregory Faranello says in a note that “the Fed is not going to get the golden egg for touching down exactly at 2%. They will be easing long before.”

By: Paulo Trevisani