CPI Data Fuels JPMorgan’s Expectation For Continued Fed ‘Insurance’ Rate Cuts

• Seasonally adjusted data from the Bureau of Labor Statistics showed a 0.3% rise in CPI for September, following a 0.4% increase in August.
• JPMorgan senior economist Joseph Seydl said that with the latest CPI inflation, the firm continues to expect the Federal Reserve to provide "insurance" rate cuts to support weakening labor demand.
• Seydl said that the core services inflation is trending lower, and this moderation is largely driven by easing shelter inflation and other service categories.

Consumer price index (CPI) data from Friday could result in the Federal Reserve continuing to provide “insurance rate cuts,” according to JPMorgan senior economist Joseph Seydl.

The U.S. consumer price index rose lower than expected in September. Seasonally adjusted data from the Bureau of Labor Statistics showed a 0.3% rise in CPI for September, following a 0.4% increase in August.

JPMorgan Senior Economist View

According to TheFly, Seydl said that with the latest CPI inflation data coming in softer than expected, the bank continues to expect the Federal Reserve to provide "insurance" rate cuts to support weakening labor demand.

In September, core CPI, which excludes food and energy, rose 0.2%, after a 0.3% increase in August. Seydl said that the core services inflation is trending lower, and this moderation is largely driven by easing shelter inflation and other service categories, which are sensitive to labor market conditions.

Seydl added that energy inflation rose 1.5% in September, the largest monthly jump since December. However, energy prices are volatile, and gasoline prices, which contributed to this spike, have since declined, he added.

He noted that the energy inflation is unlikely to continue at this pace when the October data is released. However, the White House said on Friday that the U.S. government shutdown may prevent the release of the October CPI data. 

BNP Paribas’ Take On Inflation

Sophie Huynh, portfolio manager and strategist at BNP Paribas Asset Management, said that the inflationary impact of tariffs has been “really muted.”

“Our view on the tariff impact on U.S. inflation is that, you are going to have for the next three, four, six months, prints that are going to keep growing. They might come in line with consensus expectation,” Huynh added.

Meanwhile, U.S. equities rose in Friday morning trading. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.73%, the Invesco QQQ Trust ETF (QQQ) surged 1.01%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.83%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Also See: Social Security COLA Benefit To Rise 2.8% In 2026

Share

·

Add us on