Inflation hit a bump in October after slowing for six straight months

### Inflation Rises, but Trend Favors Rate Cuts

The annual inflation rate increased last month for the first time since March, although the underlying trend is still considered favorable for potential interest rate cuts. Consumer prices rose 0.2% monthly and 2.6% year-over-year, as per the latest Consumer Price Index (CPI) data.

Half of the monthly inflation rise was attributed to housing, with energy prices remaining stable. The CPI tracks price changes in commonly purchased goods and services. Inflation has significantly eased since its peak in June 2022, steadily cooling since then. October's rise was anticipated due to challenging comparisons from the previous year and persistent housing inflation pressures.

Consensus was for a 0.2% monthly and 2.6% annual increase. Despite this month's rise, the rate at which prices increase has substantially decreased. While price control seems to have slightly regressed, tackling the last stages of inflation reduction remains challenging. Core CPI, which excludes volatile food and energy categories, increased by 0.3% monthly and 3.3% annually, aligning with September's figures.

Underlying inflation stability supports a Federal Reserve rate cut in December. Market expectations for a rate reduction surged to 82%, indicating confidence in this trajectory. Although monetary policy is gradually loosening, there are still challenges in controlling inflation fully. Risks such as geopolitical volatility, sustained consumer demand, and potential policy shifts under President-elect Donald Trump pose threats to future inflation trends.

This situation is evolving and updates will follow.