Mike Cahill Says CPI Strength Could Determine Whether the Fed Acts Next Week

According to Jin10, analyst Mike Cahill said stronger CPI data with sufficient breadth could prompt the Federal Reserve to act because it would deviate from the policy framework outlined by John C. Williams and Christopher Waller this summer. He said weaker data should be enough for the Fed to keep rates unchanged without triggering an adverse market reaction, while midrange data would be more difficult because markets are already uneasy about inflation near 2.5% and the Fed still standing pat. Cahill also said the weaker dollar reflects several factors, including the Fed's preference to keep rates unchanged and the Treasury's stated policy preference for allowing the foreign exchange market to adjust rather than putting the adjustment burden on the fixed-income market.