Global Markets Respond to Cooling Inflation and Potential Rate Cuts

The Federal Reserve's preferred measure of inflation holds steady, prompting expectations of rate cuts and impacting global financial markets.

Global oil prices extended losses after a drop of more than 2 per cent overnight as voluntary oil output cuts by OPEC+ producers for the first quarter next year fell short of market expectations.
Data on Thursday showed U.S. consumer spending rose moderately in October, while the annual increase in inflation was the smallest in more than 2-1/2 years.
The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, held steady on the month and fell to a 3 percent annual increase in October, down from 3.4 percent increases in the previous three months.
Markets are pricing in a 97 per cent chance of the Fed standing pat in its December meeting, with a 42 per cent chance of a rate cut in March next year.
The Dow Jones Industrial Average rallied Thursday to a new high for the year, with soft inflation data and strong Salesforce earnings capping the benchmark's best month since October 2022.