US Inflation Rate Rises To 3.7%, Core Inflation Falls To 4.3% - 14 September 2023

See full brokers list see-full-broker

 

The US consumer price index (CPI) accelerated in August to 3.7% year-on-year, up from 3.2% in July and above the market estimate of 3.6%. This marked the second straight month that inflation has accelerated.

Core CPI, which excludes food and energy, fell to 4.3% in August, down from 4.7% a month earlier and matched the consensus forecast. This was the lowest level since September 2021.

On a monthly basis, headline CPI rose 0.6%, up sharply from the July gain of 0.2% and matching the estimate. The main factor in the upswing was a 10.6% jump in the price of gasoline. Core CPI climbed 0.3%, up from 0.2% in July and above the market estimate of 0.2%.

The rise in inflation will make headlines in the media, but the Federal Reserve will be paying closer attention to Core CPI and will be pleased with the drop to 4.3%.

Ahead of the inflation report, the Fed was widely expected to take a pause at next week’s rate meeting, and the drop in Core CPI should cement the Fed holding rates at the target range of 5.25%-5.50%.

The Federal Reserve still has work to do in the battle against inflation, which remains above the Fed’s 2% target. Federal Reserve President Jerome Powell has stated that further rate hikes are on the table, but traders are split as to whether the Fed will hike one last time in November or take a pause.

Inflation may be higher than what the Fed wants to see, but it appears that the Fed is close to winding up the current tightening cycle, even if Powell & Co. continue to insist that the door is open to additional rate increases.

In the Forex market, the US dollar showed volatility against the majors immediately after the inflation report but then steadied, as the release had a very short-lived effect on the US currency. The EUR/USD currency pair and GBP/USD currency pair experienced swings of around 60 basis points following the inflation release but have steadied.

US stock exchanges opened just a short time ago and are showing small gains. The S&P 500 Index is up 9.84 (0.22%) at 4,470.34 and the Nasdaq 100 Index has gained 63.66 (0.42%) at 15,353.30.

RECENT NEWS

Industry Responses: Strategies For Overcoming Regulatory Challenges In US Bitcoin ETF Approval

The journey towards the approval of Bitcoin Exchange-Traded Funds (ETFs) in the United States has been fraught with regu... Read more

Navigating Market Volatility: Assessing The Impact Of A Strengthening Dollar On US Stocks

In recent months, US stock markets have experienced a notable rally, with indices reaching new highs. However, amidst th... Read more

US Inflation Dips Unexpectedly To 3.3% In May, Fed Remains Cautious - 13 June 2024

There was good news on the inflation front, as inflation decelerated in May and was lower than anticipated. Read more

Forex Today: Lower US Inflation Sends Stocks Soaring Despite Cautious Fed - 13 June 2024

US inflation data showed no increases in prices over the past month, leading to an expected fall in annualized CPI which... Read more

Forex Today: US Stock Indices Close On Record Highs Ahead Of CPI, FOMC - 11 June 2024

US Stock Market Continues Advance, European Markets Also Bullish; Gold Near 2-Month Low; Euro Finds Support; Indonesian ... Read more

Forex Today: Euro Falls On Shock Macron Election Call - 10 June 2024

Macron Calls General Election as Far-Right Wins 40% in Euro Poll; Risk Appetite Drops After Higher US Earnings, NFP Frid... Read more