October 27

10/27 – On Friday, the Bureau of Labor Statistics released a shutdown-delayed CPI report, showing a less-than-feared, 3.0% (year-over-year) increase in consumer prices. While the rate is a full percentage point above the Fed’s 2% inflation target, flagging U.S. job growth means that the Fed is likely to continue reducing interest rates – with a ¼ point reduction next week, followed by another ¼ point cut in Dec. Long-term rates are also on the decline. Ten-year treasury yields, which were 4.7% in Jan, are down to 4.0%. And Freddie Mac said the national average for 30-year mortgages was 6.19% last week – the lowest so far this year. However, future interest rates and inflation levels will face pressure from the lagging effects of tariffs, from U.S deficit spending, and from increased labor costs that will be fueled by a shrinking labor pool that is struggling to overcome boomer retirements, declining birth rates, and reduced immigration.