US annual inflation rose to 2.9% in August, versus market expectations of 2.9%.
US MoM inflation rose to 0.4% in August, from 0.2% in July, above market expectations of 0.3%.
Annual core inflation (excl. energy and food) remained at 3.1% in August in line with expectations.
MoM core inflation remained at 0.3% in August in line with expectations.
Isaac Stell, Investment Manager at Wealth Club, said, “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.”
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