"As expected, inflation ticked slightly higher during August with rising housing, food and energy costs leading the way. Core inflation however remained stable, ensuring a rate cut in September is now a forgone conclusion. The Federal reserve having been in wait and see mode since December 2024 has been given the green light today to cut rates. Inflation has not seen large upside surprises from tariff turmoil and with recent revisions to jobs data showing almost 1 million fewer jobs than previously thought,"
"the Fed's dual mandate will ensure rates are cut at next weeks meeting. With a slowing jobs market and jobless claims rising to their highest level in four years, questions may be asked whether the anticipated cut will come 'too late'. The pressure on an already embattled Fed will continue to ramp up. Thoughts now turn to the depth of the cut, with a labour market deteriorating faster than anticipated and inflation seemingly under control, a 0.50% cut becomes increasingly likely."
US annual inflation rose to 2.9% in August, matching expectations, while monthly inflation increased 0.4% from July. Annual core inflation excluding energy and food remained at 3.1%, and monthly core inflation stayed at 0.3%. Rising housing, food, and energy costs contributed to the monthly increase. Revisions to jobs data showed nearly one million fewer jobs than previously reported, and jobless claims reached their highest level in four years. The combination of stable core inflation and a weakening labor market increases the likelihood of a Federal Reserve interest-rate cut at the next meeting, with a 50 basis-point cut increasingly possible.
Read at London Business News | Londonlovesbusiness.com
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