(Reuters) – Consumer prices in the United States decelerated more sharply than expected in October, show official statistics released on Tuesday.

The Consumer Price Index (CPI) showed zero growth (0.0%) last month after increasing 0.4% in September, the Labor Department announced. Over one year, it stands at +3.2%, after a gain of 3.7% in September.

Economists polled by Reuters on average forecast a slowdown of 0.1% month-on-month and 3.3% year-on-year for the month of October.

The CPI index, excluding energy and food products, known as core inflation (“core CPI”), for its part slowed to 0.2% over one month, compared to 0.3% in September, while the consensus forecast a stagnation at 0.3%.

Over one year, the core CPI slowed to 4.0% after an increase of 4.1% in September and a consensus of the same magnitude for the month of October.

These lower than expected data caused a decline in the dollar on the markets, which fell by 0.73% against a basket of reference currencies, while the yields on ten-year Treasuries and fell respectively by almost 14 basis points. and more than 15 basis points, at 4.4902% and 4.8761%.

“We are pleased to see that the headline CPI and the core CPI are lower than expected. This tells us that the Fed is done (with raising rates), that they have nothing more to do here,” said Thomas Hayes, president of the Great Hill Capital fund in New York.

“We have to keep an eye on the potential for deflation, however, but for now, it’s the Goldilocks (scenario). This is what the Fed was looking for: slow inflation, slow down the labor market and at the same time hold the economy together,” he added.

(Writing by Claude Chendjou, edited by Kate Entringer)

Copyright © 2023 Thomson Reuters