Bank of Montreal: U.S. Core CPI Data May Surprise on the Upside
ChainCatcher news, the Bank of Montreal believes that any significant impact of the recent storm on inflation data is likely to be limited, which means that the market's reaction to any deviation in core inflation could be pronounced. The market generally predicts that this month's core CPI month-on-month rate will steadily rise by 0.3%, with a tendency for a possible unexpected upside. A reading of 0.4% or higher would cause a stir, especially in the context of the recent election of Trump.Logically, if inflation has already begun to rise before the Republican victory, the effects of tariffs and potential trade conflicts could further exacerbate inflationary momentum.However, although targeted tariffs may not push prices higher, this assumption is currently influencing the sentiment in the U.S. interest rate market. Given this market outlook, the bank expects that an unexpected rise in October's inflation data could have a significant impact on U.S. Treasury yields, with inflation data being the most direct factor that could push the 10-year U.S. Treasury yield above the 4.50% threshold.