Fed faces tough test after hot CPI, says Janus Henderson analyst

John Kerschner, a Janus Henderson analyst, cited Mike Tyson's famous quote to describe Federal Reserve Chair Kevin Warsh's situation after September's hotter-than-expected CPI inflation report, which showed a 0.65% monthly rise and a 12-month rate of 3.72%. The core CPI also exceeded forecasts at 0.33% monthly, pushing the annual rate to 2.57%, up from 2.45%. Following the data, market odds for an October 28 rate hike rose above 50%, with a December 9 increase seen as nearly certain. Kerschner noted firms are passing on higher oil costs to consumers, viewing the price surge as persistent. He believes one rate hike won't satisfy bond markets, as the Fed faces significant work ahead.