Yesterday, the U.S. Department of Labor announced the U.S. Consumer Price Index (CPI) for August. The results showed a moderate increase. The overall CPI monthly growth rate was 0.2%, in line with expectations, and the annual growth rate dropped to 2.5%, which is the lowest value since February 2021. , mainly benefiting from the impact of falling gasoline and energy prices. However, the core CPI monthly growth rate excluding food and energy rebounded to 0.3%, mainly driven by rising hotel and air ticket prices, while the annual core inflation rate remained at 3.2%.
In addition to reflecting rising travel costs during the summer travel season, the inflation report continues to show rising rents, which may affect the Federal Reserve's (Fed) interest rate decisions. Although the Fed is still expected to cut interest rates this month, an unexpected pickup in core CPI reduced the likelihood of a significant rate cut. The chance of a 2-yard cut fell to 15% from 29%, while the chance of a 1-yard cut stood at 71%, according to CME interest rate futures.
Overall, it does not affect the market trend. Not many people thought that the Fed would cut interest rates by 2% in one breath. This must be a scenario that will only occur when the economy falls into a significant recession. In addition, the Democratic Party was expected to perform better in the US election. In line with the market's original expectations, the price of cryptocurrency did not change much, with the price of Bitcoin remaining around $57,000.
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〈MICA Daily｜The annual growth rate of price index CPI dropped to 2.5%, but core inflation unexpectedly rebounded〉 This article was first published on "Blocker".
