The U.S. October CPI is coming this week, and the final stage of inflation decline is expected to be challenging

According to the Zhitong Finance APP, inflation in the U.S. for October is expected to highlight that the path to alleviating price pressures is not smooth as it approaches the Federal Reserve's target. The U.S. October CPI data will be released this Wednesday. The market currently expects that the year-on-year and month-on-month increases in the core CPI for October may remain the same as in September; the overall CPI for October may rise by 0.2% month-on-month for the fourth consecutive month, while the year-on-year increase is expected to accelerate for the first time since March.

Wells Fargo economists Sarah House and Aubrey Woessner stated, "The U.S. October CPI data may support the view that the last mile of bringing inflation back to target will be the most difficult." "The prices excluding the more volatile energy and food show that the pace of alleviating price distortions from the pandemic has been frustratingly slow." They added that core commodity prices may rise again in October, partly due to increased consumer demand for cars and auto parts following two hurricanes, which also forced more people to stay in hotels and kept service prices high.

It is worth mentioning that Minneapolis Fed President Neel Kashkari stated last Sunday that while the Federal Reserve is making progress in curbing inflation, the U.S. economy remains strong, but the Fed "is not yet done." He pointed out that strong economic growth and higher productivity could lead policymakers to lower interest rates less than previously expected in the coming months. However, Kashkari reiterated that a rate cut in December "is possible."

Bloomberg Economics economists, including Anna Wong, stated, "We expect both the U.S. October CPI and PPI to rise, which will push up long-term yields and further suppress the economy in the coming months. We expect the unemployment rate to continue to climb, reaching 4.5% by the end of the year."

Nevertheless, Fed Chairman Jerome Powell stated last Thursday, "The situation is very consistent; inflation continues on a bumpy road downward," and one or two bad reports will not change this pattern.

The U.S. October PPI data will be released on Thursday, which may rebound after stagnating in September. Meanwhile, retail sales data to be released on Friday may show substantial growth again. Fed Governor Christopher Waller will speak at a banking conference on Tuesday, after which the Fed will release the latest Senior Loan Officer Opinion Survey. Powell will attend a conference and speak later this week. New York Fed President John Williams and Dallas Fed President Lorie Logan will also speak this week.

In terms of earnings reports, investors are particularly focused on Home Depot (HD.US) and Disney (DIS.US). Home Depot will release its third-quarter earnings report before the U.S. stock market opens on Tuesday. The market generally expects Home Depot's third-quarter sales to be $39.24 billion, with earnings per share of $3.64 The views of Home Depot's management on the real estate market are noteworthy. The continued rise in long-term U.S. Treasury yields has driven mortgage rates higher, offsetting the increase in sales of building and renovation products brought about by a strengthening real estate market. Additionally, insurance claims and homeowners seeking to rebuild after two hurricanes may provide a boost to Home Depot's sales, which could have a greater impact in the third quarter earnings report.

Disney will announce its earnings before the U.S. stock market opens on Thursday, with its experience business (including Disney's theme parks, hotels, cruises, and related products) being the focus of attention—recent hurricanes forced the closure of Disney's theme parks in Florida, and consumer fatigue over inflation has led to weak performance in this segment. However, with improved profitability, the company's direct-to-consumer business should perform better. The market generally expects Disney's fourth-quarter sales to be $22.44 billion, with earnings per share of $1.10