Just-In: U.S. Annual CPI Inflation Declines To 7.7% In October

Inflation in the U.S., as estimated by the Consumer Price Index (CPI), decreased to 7.7% on a yearly basis in October from 8% in September, according to a report released on Thursday by the U.S. Bureau of Labor Statistics. This reading was less than the 8% market expectation.

In contrast to analysts’ estimates of 6.5%, the Core CPI, which does not include volatile food and energy costs, decreased from 6.6% to 6.3% on an annual basis.

The CPI and the Core CPI were 0.4% and 0.3%, respectively, for the month, falling short of forecasts made by experts in both cases.

John Briggs, Managing Director at NatWest remarked,

“It certainly shows how much the markets been keyed about, worried about and wants to run on CPI if you get any sort of help here,”

After the announcement of the CPI report, Treasury yields plummeted. The 10-year Treasury yield dropped by more than 18 basis points to 3.946%, below the crucial 4% mark. The 2-year Treasury yield decreased by more than 23 basis points to 4.395%.

Market Reaction

The U.S. Dollar (USD) faced heavy selling pressure with the initial reaction and the U.S. Dollar Index was last seen losing almost 1% on the day at 109.45.