RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Has inflation peaked? Can the Fed pivot and can the economy have a soft landing? So, the short answer is yes, I believe so and it’s certainly possible.

First, inflation peaked in June this year at 9.1%, July 8.5%, August 8.3% and September was 8.2%. That’s a trend towards lower inflation. I would not be surprised to see a 7-handle for October’s rate of CPI to be released on November 10th.

Secondly, can the Fed pivot? That is the “hot topic” recently as signs of a slowing economy become more evident. I believe they can, and they will pivot to a slower rate of rate hikes before pausing early next year. Tomorrow’s FOMC meeting will see another .75-point hike and December’s meeting is currently a 55% chance of a .50-point hike. Ten Year Notes have dropped back below 4.0%. The Fed will be given an opportunity to pump the brakes on rate hikes and give all these big hikes a chance to take hold.

Finally, that is the path to a softer landing for the economy. A hard landing or deeper recession is still avoidable. It is in the hands of the Fed…

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Frank J. Cholly

Senior Market Strategist
Frank is a swap registered trader who brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.
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