Oil-Driven Inflation Keeps Fed From Easing
US September consumer price index rose to 3.7% year-on-year from 3.4% in August, with the year-on-year increase in energy prices up 4.3 percentage points from the prior month, becoming the main driver of inflation. In addition, price gains in used cars, transportation services, and rent also widened, while core CPI rose 0.1 percentage points year-on-year. Yao-Ting Lo, Head of Investment Research at Anue Fund, pointed out that higher oil prices are the main reason the Fed cannot ease. If energy prices remain elevated, it will not only raise corporate operating costs but may also slow inflation's return to the 2% target, keeping the Fed in a restrictive stance for longer.
Employment Cools With Low Hiring and Low Layoffs
In contrast to rising inflation, the US job market has gradually cooled. US September nonfarm payrolls added only 29,000 jobs, far below 133,000 in August and below the average monthly gain of 45,000 over the past 12 months, reflecting a marked weakening in corporate hiring demand. But the unemployment rate in September remained at 4.2%, and initial jobless claims did not climb明显. Lo analyzed that this shows the US labor market is characterized by low hiring and low layoffs, meaning companies have slowed expansion without broad workforce cuts, which helps ease inflationary pressure and gives the Fed a chance to end rate hikes without triggering a recession, showing the economy remains resilient.
Soft Landing Will Decide US Stock Outlook
With rate hikes nearing an end, whether US stocks will rise depends on whether the economy can achieve a soft landing. Historical data shows that if the US economy achieves a soft landing, the S&P 500's average cumulative returns one, two, and three years after rate hikes stop reach 23%, 57%, and 93.1%, respectively. Although the US currently faces the challenge of energy prices pushing inflation higher, the job market has not deteriorated明显, and AI investment and productivity gains are supporting economic growth, so the chance of a soft landing remains relatively high. If oil prices stabilize, inflation cools gradually, and corporate earnings continue to grow, it will support US stocks' medium- to long-term performance.
Staged Deployment Instead of One-Time Chase
Lo advised that investors need not be overly pessimistic because of higher oil prices or the Fed's near-term rate decisions, but should not treat the end of rate hikes as a guarantee of an immediate market rally. At this stage, investors should continue to watch energy prices, employment changes, and corporate earnings, and replace one-time chasing with staged investment. For fund allocation, diversified US equity funds can be included, along with Taiwan equities and technology funds, to participate in the long-term AI growth trend, while using the Super Bottom King mechanism for continued regular investment and buying on dips, diversifying entry-timing risk and steadily building positions amid market volatility.