Consumer Price Index

On Thursday, 10-11-2022 investors are awaiting the release of Consumer Price Index data for the month of October, which is one of the most important indicators that the Fed looks at in determining his monetary policy. Expectations indicate that inflation will rise by 7.9% on an annual basis in October, down from 8.2% in September, If the reading came as expected inflation will have declined for the fourth month in a row, and this indicates that the Fed's policy of raising interest rates is successful in reducing inflation but the levels are still far from the Fed's target of 2%.

During the last press conference, the US Federal Reserve emphasized the need to combat inflation and he also mentioned that it is too early to think about stopping the interest rate hike cycle, as there is more hike in order to fight inflation, but it is expected that the US Central Bank will start discussing the rate of hike during the December or February meeting so the inflation reading on Thursday will be very important because it will affect the pace of raising interest rates in the coming periods.

The expectations will be as follows:

  • In case the reading came better than expectations: This indicates that the Fed may continue his strict monetary policy in order to fight inflation, and therefore this may be positive for the dollar and negative for gold and stocks.


  • In case the reading came less than expectations: This indicates that inflation continues to decline but at a slow pace and will encourage the Federal Reserve to discuss calming the pace of raising interest rates during the December meeting, and this may be negative for the dollar and positive for stocks and gold.

US yearly Consumer Price Index

Figure (1)

The market is expected to witness fluctuations the moment the data is released and then begins to return to stability so it should be noted and it is necessary to remember the golden rule: traders have different ideas and convictions in the way they interpret the data issued and therefore prices cannot move 100% according to this information.


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