The US September CPI has been released, and it's a disaster! Now, what if the US dollar cuts interest rates?

Yesterday, the much-anticipated release of the US September CPI was eagerly awaited, as it would determine the next path for US dollar interest rate cuts, with some even suggesting that there might be a chance of raising rates! Now that the data is out, the Americans are just too good at playing games; economic data is a joke.

On October 10th, data released by the US Bureau of Labor Statistics showed that the CPI in September rose by 2.4% year-on-year, slowing down from the previous value of 2.5%.

If you only look at this data, the CPI has decreased again, marking the sixth consecutive month of decline in the US CPI. You might think that the Americans have become honest and finally released a real number.

However, looking further down, many people were left dumbfounded. Behind the decline in September CPI, two other major issues emerged.

The first issue is that the CPI has once again exceeded expectations, with the forecast being 2.3%. This has been the case for several months in a row! As the saying goes, the US CPI decreases monthly, but exceeds expectations monthly. How can this continue?

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The second issue is even bigger. Excluding the more volatile costs of food and energy, the US core CPI in September rose by 3.3% year-on-year, not only exceeding expectations but also rebounding from 3.2% in August! This is the first time this year that the CPI data has rebounded.

Some experts believe that the main risk point for the US CPI has always been the core CPI. While the overall CPI is trending downward, the core CPI has always stuck above 3%. After accelerating the month-on-month increase last month, the core CPI rebounded directly this month, which is a very dangerous signal.

So, what does this CPI data mean for the current US situation?Experts have provided a conclusive assessment: The deceleration of inflation in the United States in September has been hindered, with the overall CPI and core CPI both exceeding expectations across the board, and a dangerous signal of a rebound in core CPI.

This implies that Americans may have to pivot! The possibility of pausing interest rate cuts has increased. If the employment data for October continues to be optimistic and CPI continues to rebound, they might even consider raising interest rates in November!

Why do we say this? All problems stem from Americans being too adept at manipulating economic data!

Before the interest rate cut in September, a series of poor employment data was the last straw that broke the Federal Reserve's back.

At the interest rate cut press conference on September 19th, Federal Reserve Chairman Powell even said with regret that if he had known that the non-farm employment data for the past year would be revised down by 818,000 people, he should have cut interest rates in July.

A couple of days ago, we mentioned that the three employment data released since October have been very optimistic. Just a month later, the employment situation has turned rosy again. With strikes happening one after another recently, how have they managed to improve employment?

A few days ago, we introduced that in October, the United States released three employment data.

1. The number of job vacancies in the United States increased to 8.04 million in August, reaching the highest level in three months.2. In September, the ADP employment figure reached 143,000 people, which is better than expected and significantly higher than the 103,000 people in the previous month.

3. In September, the non-farm employment figure increased by 254,000 people, far exceeding expectations; the unemployment rate in September was 4.1%, which is a further decrease from the previous month.

The only option for Americans is to slow down the pace of interest rate cuts for the dollar, to prevent the dollar from devaluing too quickly and capital from fleeing too rapidly. This is to avoid a collapse in the U.S. stock market, bond market, and foreign exchange market, as well as in small and medium-sized banks due to excessive capital outflow, and to prevent a hard landing of the U.S. economy.

Regardless of the authenticity of the economic data, at least based on the current figures, it appears that Americans indeed wish to slow down the rate of interest rate cuts.

As for whether there will be an interest rate hike in November, that will depend on how desperate they are.