Both economists polled by various news outlets and the Fed's real-time simulation system called Inflation Nowcasting differ in their forecasts. However, they have a common observation that inflation is extremely high and will remain constant. But it's the Federal Reserve that predicts Thursday's report will show the highest consumer price index ever compared to economists polled.
The Federal Reserve Bank of Cleveland predicts that the consumer price index will show last month's inflation rate of 8.2%. Economists polled by major news outlets give different forecasts, ranging from 8.4% to 8.1%.
If the responses are averaged, the forecast is that September inflation remains high, from 8.3% in August to 8.1% in September. The key difference is that the Fed is also already forecasting that the October CPI will be lowered to 8.03%. It's worth watching whether the real-time simulation system built for the Federal Reserve will have an advantage over the hundreds of economists being interviewed for these all-important reports.
How gold will react to geopolitical uncertainty and rising interest rates:
Higher interest rates will hurt gold prices and keep them under pressure until the Federal Reserve begins the process of easing the pace of rate hikes. At the same time, there are also some unexpected moments, such as the current geopolitical unrest associated with Russia and Ukraine, and the outright launch of a ballistic missile by North Korea over Japan.
There will also be a tipping point if the Federal Reserve continues to raise rates and high inflation remains entrenched and resilient. This shift in market perception will make gold the preferred major hard asset.