Danske Research discusses the US inflation outlook in light of yesterday's CPI print for the month of October.
"While markets have reacted very positively to the October CPI print, we continue to see further risks of more persistent inflation and think it is too early to trade a clear Fed pivot. Still elevated underlying price growth, tight labour markets, inflationary market reaction and China reopening risks all favour remaining cautious on inflation," Danske notes.
"The figures challenge our hawkish call for a 75bp hike in December, but Fed's focus remains on terminal rate level and maintaining financial conditions restrictive. Slower hiking pace could extend the cycle further into 2023," Danske adds.