The market's sensitivity to CPI may increase after Trump's victory

ChainCatcher news, according to analysis reports from foreign media, one of the main points in Federal Reserve Chairman Powell's speech in Jackson Hole in August was that, given the significant progress made on inflation, the Fed's response is no longer solely focused on inflation. There are clear signs that employment has become a more primary factor in determining policy. Subsequently, employment data has triggered greater cross-asset volatility in recent months.

However, with Trump's decisive victory, and more importantly, the possibility of a Republican landslide, market sensitivity to inflation data may rise again. The prospect of implementing protectionist policies through trade tariffs and expansionary fiscal policies could complicate the anti-inflation process. The market has repriced the higher terminal rate of the Fed, raising it from 3.6% to 3.75%.