ChainCatcher news, Bank of Montreal believes that any significant impact of the recent storm on inflation data may be limited, which means that the market's reaction to any deviation from core inflation may be significant. The market generally predicts that the core CPI monthly rate will rise steadily by 0.3% this month, and tends to have a possible unexpected upward trend. A reading of 0.4% or higher will cause waves, especially against the backdrop of Trump's recent election.
Logically, if inflation was already rising before the Republican victory, the impact of tariffs and potential trade conflicts could further exacerbate inflationary momentum.
However, while the targeted tariffs may not push up prices, this assumption is currently affecting sentiment in the U.S. interest rate market. Given this market outlook, the bank expects that an unexpected rise in inflation data in October could have a significant impact on U.S. Treasury yields, with inflation data being the most direct factor that could push the 10-year Treasury yield above the 4.50% threshold.