US inflation showed resilience in October, maintaining pressure on Federal Reserve (Fed) policymakers as they work to manage price stability. The core consumer price index (CPI), excluding volatile food and energy costs, rose 0.3% for the third consecutive month, according to the Bureau of Labor Statistics (BLS).

MIDF Amanah Investment Bank Bhd (MIDF Research) noted that overall CPI inflation held at a steady 0.2% month-on-month for the fourth straight month, aligning with market expectations. Annually, headline inflation ticked up slightly to 2.6% year-on-year in October, marking the first rise in seven months. Core inflation remained steady at 0.3% month-on-month, while the annual rate held at 3.3%, as projected.

Service-based inflation, particularly in shelter, transportation, and medical care services, continued its upward trend with a 0.3% monthly increase and a 4.8% annual rise. Food prices eased to a 0.2% month-on-month increase, while energy prices levelled off after previous declines. Notably, used car prices surged by 2.7% monthly but remained 3.4% lower year-on-year.

MIDF Research anticipates that while the Fed will likely maintain an easing stance amid moderating inflation and a cooling job market, rate cuts may proceed gradually. With October's CPI uptick signalling that inflation challenges persist, the Fed is expected to adopt a cautious approach to prevent inflation from rebounding as the economy remains resilient.