4Q Equity Perspectives

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Quick takes on capital markets
Today’s complex markets require actionable insights that help identify opportunities now, while positioning for what’s next. In Quick takes on capital markets, we deliver short, timely takes on top-of-mind topics for investors.
Macro views
Quick takes
Beyond the election: Fundamentals still drive markets
November 6, 2026
By 
Magdalena Ocampo

Actionable insights

Quick takes on capital markets
Today’s complex markets require actionable insights that help identify opportunities now, while positioning for what’s next. In Quick takes on capital markets, we deliver short, timely takes on top-of-mind topics for investors.
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Macro views
October CPI: Broadening price pressures keep Fed tightening on track
The October CPI report came in hotter than anticipated across both headline and core measures. Headline CPI rose 0.4% during the month, with price pressures broadening beyond energy across a wider range of goods and services. Meanwhile, the 0.3% increase in core CPI underscores the stickiness of underlying inflation. Together, these figures reinforce the case for further policy tightening—we continue to expect a 25 bp rate hike in December, followed by another 25 bp increase in March 2027.Note: The BLS did not publish year-over-year CPI changes given last year’s government shutdown.Report detailsHeadline inflation rose 0.4% in October, above expectations for a 0.3% increase. While energy remained a positive contributor, the bigger story was the widening of price pressures across goods and services. Shelter was a notable driver, accounting for more than 30% of the monthly increase. Although some of the details may reflect category-specific factors, the overall picture suggests that inflation pressures are not confined to energy-related segments and that underlying price pressures remain sticky. Energy prices rose 0.7%, a more modest increase following September’s 5.2% surge. Encouragingly, Brent crude oil prices have recently fallen to near $90 per barrel, and concerns over an escalation of the conflict in the Middle East have eased. Nevertheless, oil prices remain meaningfully higher than at the start of the year, while elevated transportation costs and ongoing disruptions to diesel supplies due to refinery damage in the Middle East and Russia continue to pose upside risks. This suggests the risk that higher energy costs will feed through to broader prices remains elevated.Food inflation firmed in October after a few months of more contained readings, with both food at home and food away from home posting meaningful increases. Within food at home, four of the six major categories posted price gains, adding to affordability pressures for consumers. Looking ahead, still-elevated diesel and fertilizer costs stemming from trade flow disruptions in the Middle East, along with El Niño-related weather threatening agricultural production, suggest that upside risks to global food commodity prices persist.Core inflation, which excludes food and energy, came in stronger than expected in October. Notably, core CPI has now risen by 0.3% for three consecutive months, a pace that remains above the threshold widely regarded as progress toward price stability. While shelter was a key contributor, with owners’ equivalent rent edging higher, price pressures were evident across a broad range of categories, including medical care, recreation, education, furnishings and tech-related goods. Although declines in used vehicle prices and vehicle rental costs provided some relief, they were not enough to offset broader signs that inflation pressures remain sticky.The Fed’s preferred supercore inflation measure rose 0.4%, matching September’s increase and providing little evidence that underlying price pressures are easing sustainably.Policy outlookThree consecutive firm inflation reports, with price pressures broadening across both core goods and services, suggest inflation is becoming more entrenched. The persistence and breadth of inflationary pressures come at a time when affordability concerns remain top of mind for households. The message for the Fed is therefore uncomfortable, but clear: the inflation fight is not finished.The latest data, however, are unlikely to be sufficient to trigger a 50 basis point rate hike in December. Such a move would likely require evidence that inflation is accelerating decisively, inflation expectations are becoming unanchored, or the economy is overheating. Those conditions have yet to materialize: despite the resilience in the labor market, real wage growth remains negative, and there is little evidence of a wage-price spiral.A more measured Fed approach therefore remains the most likely path forward. Investors should continue to expect a 25 bp hike in December, followed by another 25 bp increase in March of next year, as policymakers seek evidence that inflation is moving sustainably back toward target.
November 10, 2026
Macro views
October jobs report: Resilience keeps December hike on the table
A resilient labor market and firmer wage growth keep a December Fed rate hike in play.
November 9, 2026
Real estate & private markets
The U.S. CRE Health Index: Taking the market’s pulse
November 9, 2026