Bankinter | Inflation was in line with expectations. October CPI rose 2.6% vs. 2.4% previously. Month-on-month, it rose 0.2%. The Underlying rate rebounded to 3.3% year-on-year and 0.3% month-on-month.
Analysis team’s view: Inflation rose by two tenths, but this was not surprising and the market made a good reading. What is really important is that prices will probably continue to rise in the coming months, especially from 2025 onwards, when D. Trump’s measures, which are expected to be inflationary will be introduced, among them tariffs, immigration controls, tax cuts… This trend of higher prices will mean that the Fed will have to slow down its process of lowering interest rates. This will have a direct impact on the US T-Note’s IRR. In any case, we maintain our estimate that the Fed will cut rates by 25 b.p. at the next meeting on 18 December.
