US CPI Inflation Numbers Mixed, Fail to Get Markets Moving
The release of the US August Consumer Price Index (CPI) report has been highly anticipated. However, it’s important to note that this data point is not expected to have a significant impact on the likelihood of a September rate hike by the Federal Reserve (Fed), which was priced at just 7% ahead of the release.
Instead, market attention is focused on how this CPI report will influence pricing for rate hikes in the November meeting, where probabilities are approaching 50/50. The headline number in the CPI report is expected to show an acceleration from July, primarily driven by increases in energy prices, particularly Oil and gasoline.
The recent surge in Oil prices, exemplified by the fresh 10-month high of $89.35 in WTI crude yesterday, is a major concern for financial markets. The rising energy costs can contribute to inflationary pressures and impact central bank decisions. Today the CPI report showed another increase, although core CPI YoY declined, left the USD and risk assets unmoved.
US August Consumer Price Index Inflation Report
- August CPI MoM +0.6% versus +0.6% m/m expected
- July CPI MoM was +0.2%
- CPI YoY 3.7% versus 3.6% expected
- Prior CPI YoY was 3.2%
Core measures:
- Core CPI m/m +0.3% versus +0.2% expected. Last month 0.2%
- Unrounded core CPI at +0.278%
- Core CPI YoY 4.3% versus 4.3% expected. Last month was 4.7%
- Shelter +0.3% versus +0.4% last month. Year on year 7.3% versus 7.7% last month
- Services less rent and shelter +0.5% m/m vs +0.2% prior
- Real weekly earnings -0.1% vs 0.0% prior
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