According to BlockBeats, the market's attention this week is on the upcoming inflation data, with the August CPI inflation report set to be released at 8:30 PM UTC+8 on Wednesday. Economists predict that the overall CPI for August in the United States will slow to 2.6% year-on-year from 2.9% in July. Several economists suggest that falling natural gas prices and stable food prices may help control overall inflation. If these predictions hold true, the year-on-year CPI inflation will reach its lowest level since March 2021. The core CPI inflation, which excludes food and energy prices, is expected to drop to 3.2% year-on-year. These forecasts align with the estimates from the Cleveland Federal Reserve's Nowcast model.
According to CME's 'FedWatch,' there is a 70% probability that the Federal Reserve will cut interest rates by 25 basis points in September, and a 30% probability of a 50 basis point cut. If inflation unexpectedly declines, the expectation for a 50 basis point rate cut is likely to increase further. On the other hand, if the report meets expectations or shows a slight increase in inflationary pressure, it may not change the market's anticipation of the Fed's rate adjustment but could somewhat temper the subsequent dovish rhetoric.