🌴📉 Inflation Pressure Drop, Fed Might No Need Jack Up Rates

⬇️ Pidgin | ⬇️ ⬇️ English

We get one cool story for you guys from da world of big bucks and interest rates. Remembah how da Fed wen’ crank up da interest rates? Look like dey might no need do dat no more. Why? Cause da inflation, you know, da one wen’ make everything expensive, start for cool down small kine. 🌬️💸

Tuesday, we wen’ hear about dis October inflation report, and ho, was more chill than we thought. Da report show da prices not jumping up like one kangaroo anymore. Dis one good news for da Federal Reserve, cause look like their plan for fight da crazy-high prices is working. Maybe now, they no need for keep raising da rates. 🏦👍

Check dis out: Da overall Consumer Price Index, or CPI, wen’ slow down to 3.2 percent last month. Dat’s lower than da 3.7 percent in September and da coolest since July. Looks like part of why dis happen is cause energy prices wen’ stay more moderate. 🛢️📊

Even if we take out da kine unpredictable food and fuel prices, da “core” price measure wen’ up 4 percent in da year through October. Dat’s slower than what da economists wen’ expect. 🍔⛽

Remember last year, when inflation was like one crazy wave, peaking at over 9 percent? Well, da Fed guys wen’ try for bring that down to around 2 percent, which was da normal before da pandemic. They wen’ do dis by raising interest rates, hoping for slow down spending from people and businesses. 🛍️🔽

But, before dis latest report, da price drop kinda wen’ stall. Now, we seeing some movement again. Supply chain problems, da ones that wen’ make stuff like bikes and bed frames expensive, they starting for go away. Dat means prices for those items not going up so fast or even going down. But housing and other services, which are more linked to da overall economy, they was more hard for control. 🚲🛌

Good news is, da latest data show progress in these areas. Housing costs, which wen’ up unexpectedly in September, now they moderating. And inflation in other services, like getting one manicure or health care, also wen’ down. 🏠💅

All dis mean is inflation is going da right way. Da central bankers must be stoked, cause they trying for cool down da economy just enough for bring down prices but no make one recession. 📉🎯

So, what da Fed guys going do next? They wen’ raise interest rates to between 5.25 and 5.5 percent, up from near zero in March 2022. Now, they wondering if they need for do one more small increase. But after dis report, plenty investors and economists thinking maybe they no need. 🤔💹

Da stock market wen’ jump up after hearing dis news. Investors thinking maybe da Fed going keep da interest rates where dey stay. Da yield on da two-year Treasury, which reacts to rate change expectations, wen’ drop big time after da report. 📈🏦

But no think da Fed guys going just kick back and relax. They still got their eye on da ball. They know they not completely out of da woods yet. For example, they watching how people and businesses thinking about inflation for da future. Dey also not going get too excited about one or two good numbers, worried dat things might flip again. 🧐🔄

Jerome H. Powell, da Fed chair, he said last week, “We know dat ongoing progress toward our 2 percent goal is not assured: Inflation has given us a few head fakes.” But, plenty economists stay expecting more good news in 2024. Da guys at Goldman Sachs saying get “further disinflation in the pipeline” coming from different markets. 🚗🏠💼

For now, da Fed likely going shift their focus to economic growth, watching for signs that it’s cooling to a sustainable pace. If demand weakens as expected, consumers going stay or become more price sensitive. Dat means businesses gotta either lower prices or risk losing customers. 🛍️🔽

Some businesses already seeing dis change. Like Rachel Glaser, da chief financial officer at Etsy, she said they traditionally not really compete on price. But now, they starting for give small kine discounts cause consumers more picky. 🛒💰

So, that’s da scoop. Inflation pressure dropping, and da Fed might no need raise rates again. We stay watching how dis going play out, but for now, looks like we heading in da right direction. Aloha and stay tuned for more updates

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NOW IN ENGLISH

🌴📉 News Update: Inflation Chill Down, Less Pressure on Fed for Rate Hikes

Here’s the latest scoop from the world of finance and interest rates. Looks like the Federal Reserve might not need to raise rates again. Why? Because inflation, the culprit behind soaring prices, is finally cooling off a bit. 🌬️💸

On Tuesday, the October inflation report came out, and it was cooler than expected. The data shows that price increases are slowing down, signaling that the Federal Reserve’s strategy to combat rapid inflation is bearing fruit. This also suggests that further rate increases may not be necessary. 🏦👍

Let’s dive into the details: The overall Consumer Price Index (CPI) slowed to 3.2 percent last month, lower than the 3.7 percent in September and the coolest since July. This deceleration is partly due to more stable energy prices. 🛢️📊

Excluding the volatile food and fuel prices, the “core” price measure rose by 4 percent over the year through October, slower than previous readings and below economists’ expectations. 🍔⛽

Remember when inflation peaked at just above 9 percent last year? The Fed has been working to bring it down to about 2 percent, which was the norm pre-pandemic. They’ve done this by increasing interest rates, aiming to slow down consumer and business spending. 🛍️🔽

Before this report, the decrease in prices had slowed down. But now, we’re seeing movement again. Issues like supply chain disruptions, which drove up the costs of items like bikes and bed frames, are resolving, leading to price stabilization or even decreases. However, costs in housing and other services, more closely tied to the overall economy, had been more resistant to change. 🚲🛌

Fortunately, the latest data shows improvement in these key areas. Housing costs, which had spiked unexpectedly in September, are now moderating. Inflation in services, including everything from beauty treatments to healthcare, has also declined. 🏠💅

All this means inflation is heading in the right direction, a positive sign for the central bankers as they aim to cool the economy just enough to reduce prices without triggering a recession. 📉🎯

What’s next for the Fed? They raised interest rates to between 5.25 and 5.5 percent, a significant increase from near zero in March 2022. Now, they’re contemplating whether a final minor rate hike is necessary. But post-report, many investors and economists think it might not be needed. 🤔💹

Following the release of this report, the stock market saw a significant uptick. Investors are hopeful that the Fed will maintain current interest rates. The yield on the two-year Treasury, which reflects interest rate expectations, also fell sharply. 📈🏦

However, the Fed isn’t off the hook just yet. They’re still keeping a close watch on various indicators. For instance, they’re monitoring consumer and business inflation expectations. They’re also cautious about getting too excited over a couple of positive reports, aware that the trend could reverse. 🧐🔄

Fed Chair Jerome H. Powell mentioned, “We know that ongoing progress toward our 2 percent goal is not assured: Inflation has given us a few head fakes.” Nonetheless, many economists are optimistic about further declines in inflation in 2024. Goldman Sachs analysts even predict more “disinflation” due to changes in the car, rental, and labor markets. 🚗🏠💼

For now, the Fed’s focus may shift towards economic growth, monitoring for signs of it settling at a sustainable rate. As demand potentially weakens, consumers are expected to become more price-conscious, compelling businesses to reduce prices or risk losing sales. 🛍️🔽

Some businesses are already noticing this shift. For instance, Rachel Glaser, the CFO of Etsy, mentioned they’ve started to offer discounts as consumers become more selective, a departure from their traditional strategy of competing on product uniqueness rather than price. 🛒💰

So there you have it. Inflation is easing, reducing the need for further rate hikes by the Fed. We’ll keep an eye on how things unfold, but for now, it seems we’re heading in the right direction. Stay tuned for more updates! 🌺📰