Markets are looking closely at the data for the ninth month of the year as it could provide clues about the Fed's normalization of monetary policy.

The US consumer price index (CPI) stood at 2.4% year-on-year in September, a one-tenth slowdown from the previous data and its lowest figure since February 2021, the Department of Labor's Bureau of Labor Statistics reported on Thursday.

However, the underlying index, which excludes food and energy prices due to their greater volatility, closed the ninth month of 2024 with an increase of 3.3%, one tenth more. Afterwards, food prices rose by 2.3% year-on-year, while energy was 6.8% cheaper in September than twelve months earlier.

On a monthly basis, the overall index rate rose by 0.2%, the same amount as in July and August, while the underlying rate rose by 0.3%, the same as in July.

Markets are keeping an eye on September's data as it could provide clues about the normalisation of monetary policy by the US Federal Reserve (Fed), although the Fed's preferred variable for monitoring the cost of living is the personal consumption expenditure (PCE) price index.

MONETARY POLICY

The Fed's Federal Open Market Committee (FOMC) decided in September to lower interest rates for the first time since March 2020 to the target range of between 4.75% and 5%.

The Fed stressed in its statement that it now had "greater confidence" that inflation was converging steadily toward the 2% target, and that the risks to optimizing employment and prices were "roughly balanced."