So the CPI release came out and we’re seeing big moves down on USD.
Can you explain to me why the release made USD react the way it did. News release states:
Oct monthly inflation up slightly 0.4%
yearly down to 7.7% from 8.2%
core yearly down to 6.3% from 6.6%
Isn’t it good that inflation is down? Or was that expected but it didn’t move the right amount?
Or is it more about interest rates and now that inflation seems to be coming down (right?), interest rates won’t go up (?), and… that’s bad for the US economy?
Right now, nothing matters but when they will stop raising interest rates. Any sign that inflation is subsiding will be overindulged by the markets…like a 5 year old left alone with an open cookie jar.
Carry trade 101 is the higher interest rate wins.
Dollar is safe haven as well so any risk on is dollar off…right now.