News Digest:

US inflation unexpectedly accelerated in August due to rising housing and travel costs, dampening expectations for a significant interest-rate cut by the Federal Reserve next week.
The core consumer price index (CPI), which excludes food and energy costs, rose by 0.3% from July—the largest increase in four months—and 3.2% from a year earlier, according to data released by the Bureau of Labor Statistics on Wednesday. Economists consider the core CPI a more accurate gauge of underlying inflation than the overall CPI.

The Federal Reserve is anticipated to begin its long-anticipated rate cuts next week, likely with a modest 0.25 percentage point reduction, as persistent underlying inflation pressures discourage more aggressive measures.

A Bloomberg report suggests that traders now assign only a 15% probability to a half-point rate cut at the Fed’s policy meeting on September 17-18, down from around 29% prior to the report. This adjustment follows data showing that the consumer price index increased by 2.5% in August from a year earlier, a decrease from July’s 2.9% rise.

End Notes

Source: https://www.business-standard.com/world-news/us-fed-likely-to-start-long-awaited-interest-rate-cuts-from-sep-17-meet-124091101413_1.html#goog_rewarded/

Source: https://www.bloomberg.com/news/articles/2024-09-11/core-us-inflation-picks-up-as-housing-costs-continue-to-rise/