Last week’s news brought more inflation as year-over-year prices accelerated in Canada, the US, and the UK. In the US, core inflation (excluding volatile food and energy prices) increased by 0.2% on a monthly basis and at an annual rate of 2.9%, in line with estimates.
The report was a mixed bag, with vehicle prices falling 0.3% and apparel prices rising 0.4%. Household furnishing, which has been impacted by tariff imports, increased 1% over the month.
President Donald Trump again called for lower interest rates. “Consumer Prices LOW. Bring down the Fed Rate, NOW!!!” Trump posted on Truth Social, calling for a rate cut as high as 3 points.
Next week is crisscrossed with European news, including manufacturing PMIs from multiple countries and a rate decision. Following last month’s anticipated cut, the European Central Bank is likely to have reached the bottom for the current cycle and will maintain the main financing rate at 2.15%. Any deviations from this consensus would likely cause significant volatility.
Thus, the economic focus will be on the earnings season in the US, with market giants such as Alphabet, Tesla, Coca-Cola, and Intel reporting their earnings. Additionally, the market will hear the latest opinion from Federal Reserve Chairman Jerome Powell. The leading global central banker, whose mandate ends next year, might use the opportunity to respond …