JPMorgan Chase: The Fed will only take tightening action if inflation returns to or exceeds 4%

JPMorgan's market team believes that inflation data is more likely to heat up than cool down. Nevertheless, they believe that hotter data this week is unlikely to derail the tone of risk appetite, and investors are unlikely to cling to one data point because there is another CPI data release before the December Fed meeting. "However, the team reminded investors that Powell has shifted the Fed's focus from the labor market to the dual task of balancing employment and inflation. "If data such as CPI or even retail sales show a stronger economic growth trajectory while also stimulating inflation, then it is necessary to pay attention to what will happen in the future." In JPMorgan's view, investors are unlikely to shift to a cautious portfolio stance until they see the overall CPI annual rate reach 3.5%, which is a credible threat to the Fed. They believe that the Fed will only take tightening actions if the inflation rate returns to or exceeds 4%. (Jinshi)