The Federal Reserve's Latest October Inflation Forecast Has Arrived, and It's Terrible News for Wall Street

The Federal Reserve's October inflation forecast shows concerning reacceleration in both headline CPI (3.77%) and Core PCE (3.13%), suggesting persistent inflation pressures beyond energy shocks. With inflation remaining above the Fed's 2% target for 67 months, the probability of multiple rate hikes reaching 4.50%-4.75% by September 2027 stands at 72%. This aggressive rate-hiking cycle poses significant risks to the historically expensive, AI-driven stock market, potentially triggering a sharp correction if borrowing costs rise and AI infrastructure spending slows.