Post-CPI Analyst Takes: BofA Eyes November Fed Hike (1/2)

Most sell-side analysts regarded the September CPI report as a hawkish surprise vs their expectations, but we saw no fundamental changes in outlook for Fed policy, with most saying the acceleration in core metrics wasn't enough in itself for the Fed to hike again.

• One exception is BofA who retain their 25bp November hike view: "The Fed is still data-dependent and [the] CPI release coupled with last week’s employment report very much support a hike in November, in our view. That said, recent commentary from Fed speakers has leaned in the direction of a pause. There’s still some time before the blackout period, which starts on October 21, for the Fed to give more guidance on the November decision.”
• Goldman Sachs expects core CPI to continue rising around 0.3% M/M from Oct through Jan, with moderation in shelter and car prices offsetting a positive swing in health insurance. But "while somewhat above our expectations, we do not expect [the] CPI report to affect the outcome of the November FOMC meeting, for which we expect unchanged policy. Recent commentary by Fed officials has also sent a strong signal that the FOMC is likely to keep the funds rate unchanged in November.”