The U.S. seasonally adjusted core CPI for August saw a 0.3% month-on-month increase, surpassing the expected 0.2%. Meanwhile, the unadjusted year-on-year CPI for August was 2.5%, slightly below the forecast of 2.6% and down from 2.9% in the previous month, marking five consecutive months of decline and the lowest rate since February 2021.

This continued slowdown in headline CPI aligns with expectations, but the higher-than-expected monthly core inflation suggests that the Fed is likely to opt for a 25 basis point rate cut next week, rather than a larger 50 basis point reduction.