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US Core CPI Exceeds Expectations in August, Markets Bet on First Fed Rate Hike in Three Years
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On September 11, data from the US Bureau of Labor Statistics showed that core CPI, excluding food and energy, rose 0.3% month-over-month and 2.4% year-over-year, exceeding expectations. Headline CPI, driven by higher energy prices, increased 0.4% month-over-month and 3.4% year-over-year. The report indicated that inflation made minimal progress toward the Federal Reserve's target, with persistent pressures from the Iran war, tariffs, and data center construction. Previously, some officials suggested the decision at the September 15-16 meeting would depend on incoming data. Given this release, the Fed is likely to view it as paving the way for its first rate hike in three years. Investors increased bets on a rate increase, causing US Treasury yields to rise while stock index futures remained elevated. Fed Chair Warsh has previously been reluctant to signal the central bank's next move. The US economy also faces challenges from rebounding energy prices due to supply disruptions from conflicts in the Middle East and the Russia-Ukraine war. Oil prices broke through $100 per barrel, and US retail diesel prices hit record highs.
Source report
September 11 — Data released Friday by the U.S. Bureau of Labor Statistics showed that core CPI, which excludes food and energy, rose 0.3% month-over-month and 2.4% year-over-year. Driven by higher energy prices, headline CPI increased 0.4% month-over-month and 3.4% year-over-year.
The report indicated that inflation made little progress toward the Federal Reserve's target last month amid persistent pressures from the Iran war, tariffs, and data center construction.
Previously, some officials had suggested that the decision at the September 15–16 meeting would depend on incoming data. Given this latest release, the Fed is likely to view it as paving the way for its first rate hike in three years.
As investors stepped up bets on a rate increase, U.S. Treasury yields rose while stock index futures remained elevated. Fed Chair Warsh has previously been reluctant to signal the central bank's next move.
Meanwhile, the U.S. economy faces challenges from rebounding energy prices due to supply disruptions caused by conflicts in the Middle East and the Russia-Ukraine war. This week, oil prices broke through $100 per barrel, and U.S. retail diesel prices hit record highs.
Source
thsNeutral / independent