US inflation 3.2%, down from 3.7% in September | Golden Times

THIS WEEK

the October Consumer Price Index (CPI) report revealed a year-on-year increase of 3.2%. This fell slightly below the forecast of 3.3% and showed moderation from September’s 3.7%. The core CPI rate for October was up 4.0%, compared to the consensus forecast of 4.1%. This data aligns with the perspective of U.S. monetary policy doves, advocating for a pause in the Federal Reserve’s interest rate hikes. The response was a solid downtick in U.S. Treasury yields and a sharp selloff in the U.S. dollar.

U.S. retail sales experienced a modest decline of 0.1% last month, marking the first decrease in seven months, as per new government data. However, this dip was less than anticipated, with a significant portion attributed to reduced spending on gas. When excluding auto and gasoline spending, sales actually increased by 0.1% from the previous month. This suggests that while there might be a pullback in significant purchases, people are still engaged in shopping activities as the holiday quarter kicks off.

These developments led to a sense of victory on Wall Street in the battle against inflation, sparking a surge in stocks as optimism grew around the potential halt to the Fed’s tightening cycle.

APEC Summit in San Francisco

President Biden and Chinese leader Xi Jinping concluded a four-hour meeting at the APEC summit in San Francisco on Wednesday, reaching agreements on restarting military-to-military communications and taking steps to curb fentanyl production. This meeting, the first between the two leaders in a year, holds the potential to usher in a more stable period in U.S.-China relations after years of escalating tensions. Biden described the discussions as some of the most constructive and productive, emphasizing the importance of resuming military ties to prevent accidents and miscalculations. Xi highlighted the need for major countries to cooperate, addressing issues like climate change and artificial intelligence, while urging Biden to avoid supporting “Taiwan independence” and to halt weapons sales to Taiwan. The leaders also discussed global conflicts, including the war in Gaza, Russia’s actions in Ukraine, and China’s exit bans on U.S. citizens. This meeting follows months of intense diplomacy, indicating a diplomatic effort to navigate complex issues and improve bilateral relations.