The lower-than-expected inflation data for October led to widespread optimism among investors that the Federal Reserve may limit the interest rate hike in its upcoming meeting to 50 basis points. Following the release of the CIP data last week, the indexes posted their biggest intraday gains in more than two years.
However, since inflation is still far above the level accepted by the Fed, the rate hikes are expected to continue for a while. According to Dallas Fed President Lorie Logan, “CPI data were a welcome relief, but there is still a long way to go.”
