Barclays: The market is unlikely to change the Fed's rate cut expectations, and the optimistic narrative for the U.S. economy may continue.

According to a TechFlow report on October 24, Jin10 data reported that Julian LaFarge, Chief Market Strategist at Barclays Private Bank, pointed out: “From a market impact perspective, unless there is a significant upward surprise in U.S. inflation data, the market is unlikely to change its expectations for further rate cuts from the Fed.” Besides the frequent fluctuations due to the trade war, the market has recently been boosted by a strong corporate earnings season. According to tracking data from the Atlanta Fed, the U.S. GDP growth rate for the third quarter was close to 4% before the government shutdown, indicating that the economy still possesses remarkable resilience. Although it is not easy to shake this optimistic narrative, an unexpected CPI might just be the trigger point. Stephanie Link, Chief Investment Strategist at Hightower Advisors, stated: “If the CPI data is higher than expected, I anticipate increased market volatility. However, I would view this as a buying opportunity, as the current economy remains strong, the Fed has begun a rate-cutting cycle, and corporate earnings are growing at double digits, while the fourth quarter has historically been the strongest quarter of the year.”