CPI

US inflation was firmer than expected in August, likely keeping the Federal Reserve on track for a third-straight 75 basis-point interest-rate hike.

Inflation did not ease as expected in August, with an 8.3 percent rise in the Consumer Price Index showing that the squeeze on consumers remains acute.

The global economy is slowing sharply, and threats remain to the American recovery if European sanctions force millions of barrels of Russian oil off the global market in the months to come. The National Federation of Independent Business reported on Tuesday that its Small Business Optimism Index rose in August as inflation anxiety eased, continuing a rebound from its depths earlier this year. [have](https://www.nytimes.com/2022/06/10/business/economy/may-2022-cpi-inflation.html) [repeatedly](https://www.nytimes.com/live/2022/07/13/business/cpi-report-inflation) [predicted](https://www.nytimes.com/2022/02/10/business/economy/inflation-cpi-january-2022.html)that inflation was about to decelerate only to have those expectations scuppered. Biden and his party, as Democrats seek to retain control of the House and Senate. Biden has claimed progress in the fight against inflation, including with the signing last month of an energy, health care and tax bill that Democrats called the Inflation Reduction Act. “And then of course all of this is further exacerbated by what’s going on with the war in the Ukraine.” That could be poised to continue, because those prices are closely linked to wages, which have been climbing notably as a result of a strong job market with low unemployment and worker shortages that span many fields. Last Thursday, India also [banned exports](https://www.wsj.com/articles/indias-rice-export-ban-will-further-strain-global-food-supplies-11662722548) of one kind of rice and put a tax on others, in an effort to shore up supplies and fight domestic inflation. After peaking at $5.02 in June, gasoline prices have dropped for 91 straight days, and the national average stood at just over $3.70 a gallon on Tuesday, data from AAA show. A bout of bird flu earlier this year made chickens and eggs scarce, driving up the prices of both. Stock prices swooned as Wall Street digested the possibility that the Fed might need to be even more aggressive in constraining the economy in order to wrangle an inflation problem that is worse than anything America has faced since the 1980s. Food prices in August were up 11.4 percent from the same month a year ago.

Tuesday's US economic docket highlights the release of the critical US consumer inflation figures for August, scheduled later during the early North A.

Gold extended its slide and dropped below $1,700 for the first time in a week on Tuesday. EUR/USD came under heavy bearish pressure and lost more than 100 pips following the US inflation report, which showed a stronger-than-expected increase in Core CPI in August. GBP/USD suffered large losses and dropped below 1.1550 in the early American session on Tuesday. The author makes no representations as to the accuracy, completeness, or suitability of this information. The purchasing power of the USD is dragged down by inflation. In case the pair clears that hurdle and flips into support, it could test 1.0200 (psychological level, Monday high) and target 1.0245 (static level) afterwards.” “On the downside, 1.0100 (200-period SMA, Fibonacci 50% retracement) aligns as key support. The immediate market reaction to the report, however, is more likely to be limited as investors now start repositioning for the FOMC monetary policy meeting on September 20-21. The yearly rate is also expected to decelerate to 8.1% in August from the 8.5% previous. This could drag the US Treasury bond yields and the USD lower. This, in turn, keeps the US dollar depressed near the monthly low. We believe the YoY headline CPI should fall five-tenths to 8.0%, while core should tick up a tenth to 6.0%.”

Monthly U.S consumer prices unexpectedly rose in August as declining gasoline prices were offset by gains in the costs of rent and food, giving cover for ...

This is going to put the idea of transitory inflation to bed for now and anchor U.S. “It takes a long time to introduce inflation into the economy and it takes a long time for it to slow down. The key thing here is that we're now looking at near-certain odds on a 75 basis point move next week, but also potentially a 50 basis point or higher move in November." However, the real story is the fact that the core rate is continuing to rise and which now makes another 75bps hike being delivered by the FOMC this month look like a certainty. This implies the Fed will remain in tightening mode for longer and suggesting interest rates still have some way to go before they reach the terminal rate." That just shows that it is not which means that the Fed is going to remain aggressive for longer. People were expecting inflation to peak and read into that reversal and interest rates next year, which we think is just absolutely naive to think that's going to be the case. “Crude prices started to come down and people took that in recent weeks as a hint that inflation was slowing. “This suggests an aggressive move by the Fed is on the horizon. Inflation was supposed to show a cooler print, PPI tomorrow is now potentially going to be hotter too, that just suggests that it is not responding as quickly to the Fed action as everyone said it would and was supposedly happening. “I’m not surprised, I’ve been saying all along it is going to be hot, so 75 (basis points) is now locked and loaded, there is absolutely no discussion about that. “The good news is "peak narrative" holds as July was the highest print.

Inflation saw a 0.1% for August according to the CPI report, but this was almost entirely due to gasoline prices, other prices rose more than the Fed wanted ...

So markets believe that today’s report has made the Fed slightly more nervous about where inflation is trending. inflation may be trending in the right overall direction, but it’s not getting there fast enough for the Fed. The Fed wants to see a broad range of prices signal that the wave of inflation is past, that’s not a conclusion that’s easy to draw from this CPI report. So today’s inflation report despite the low month-on-month number is not good news for markets. Even though food costs rose 0.8% for the month, which is high, that’s still the lowest level of food price inflation that we’ve seen in many months. Still the CPI report was not entirely negative.

At midday, the Dow Jones Industrial Average had dropped almost 900 points, down by 2.7% to 31497, the S&P 500 was down by 3.1% at 3983,...

A 75- basis point hike this month, will be the third such increase this year as rate setters seek to tame inflation which, as things stand, remains around 40-year highs. The inflation data is due out at 8.30am ET. The Fed is almost fully expected to raise the rates by another 75 basis points at next week’s FOMC (Federal Open Market Committee) meeting. What will happen after is, however, up to the data,” she said. These increases were mostly offset by a 10.6% decline in the gasoline index,” the Bureau said. “Importantly for financial markets (and the Fed), surveys of consumers’ inflation expectations are coming down from highs in line with peaking actual inflation,” he said. These expectations are likely to shore up stock prices for now. Market expectations point to a slowing inflation rate, with the headline figure seen easing steadily to 8.1% in August from 8.5% in July and the peak of 9.1% in June. US stocks were expected to continue their recent rally at the start on Tuesday ahead of crucial inflation data for August which is predicted to show that price pressures in the world’s biggest economy may have already peaked. US stocks plunged ahead of the open on Tuesday after new data from the US Bureau of Labor Statistics show inflation increased more than expected in August, likely locking in a 75 basis point interest rate hike from the Fed later in the month. US stocks opened firmly in the red after the release of hotter-than-expected inflation data for August which is expected to have locked in a 75 basis point interest rate hike by the Fed over a more moderate 50 basis point increase later this month. US indices were in the red at midday, as investor sentiment soured over the US Federal Reserve's plan to increase interest rates until it is clear inflation is on a downward path.

It's becoming a game of Whac-A-Mole for the Federal Reserve to keep consumer prices from shooting up. That might mean an aggressive-for-longer stance on ...

CoinDesk is an independent operating subsidiary of [Digital Currency Group](https://dcg.co/), which invests in [cryptocurrencies](https://dcg.co/#digital-assets-portfolio) and blockchain [startups](https://dcg.co/portfolio/). Futures trading in federal funds now reflects a minor probability of the Fed raising rates by 100 basis points next week and suggests the rate-hike cycle peaking at 4.25% in March 2023. Ahead of the data, interest-rate traders expected the Fed to hike borrowing costs by 75 basis points (0.75 percentage point) at the U.S. The U.S. Prices for risky assets tumbled after the CPI release, with bitcoin falling from $22,700 to nearly $21,000. The market now has to bear that adjustment." Consumer Price Index](https://in.investing.com/economic-calendar/cpi-733), which showed the 12-month inflation rate slowed to 8.3% in August from 8.5% the prior month – a tiny decrease that is likely to keep investors worried about sticky price pressures. [strict set of editorial policies](/ethics/). The CPI report had been expected to slow to 8.1%. The Federal Reserve’s target for inflation is 2% annually. [Turek tweeted](https://twitter.com/jturek18/status/1569683544661704706) after the CPI release: "I think the pricing assumption now has to be 75, 75, 50, 25. The path forward for risk assets, including cryptocurrencies, may have become more challenging.

Bitcoin falls by 7.5% amid a wider sell-off in the crypto market after the August CPI data came in higher than expected.

Break 19k, and it goes to the main target of 14k-16k for the last low.— il Capo Of Crypto (@CryptoCapo_) Sign up here!](https://www.kitco.com/services/e-mail-lists-signup.html) [(Kitco News)](/) - The cryptocurrency market faced significant downward pressure following Tuesday’s higher-than-expected Consumer Price Index (CPI) print, which came in at an annual increase of 8.3% after 8.1% was expected. Current pivot is 21k. [ETH](https://www.kitco.com/price/ethereum)), which had rallied to start the week in anticipation of its upcoming Merge, saw its price plummet 9.42% from its daily high of $1,760 to a low of $1,592 before support arrived to stem the outflow and bid it back above $1,600. [Editor's Note: With so much market volatility, stay on top of daily news! [BTC](https://www.kitco.com/price/bitcoin)) traders were bullish in the early hours on Tuesday, which resulted in the price of BTC rising to resistance at $22,800 before the CPI announcement sparked a 7.5% sell-off in price that resulted in the top crypto hitting a low of $21,080.

Consumer prices in August climbed 0.1 percent compared to the month before, despite falling costs for gas and energy. A number of economists had been ...

[beginning to feel better ](https://www.washingtonpost.com/business/2022/09/10/economy-inflation-gas-prices/?itid=lk_inline_manual_36)about the economy, and consumer sentiment, which collapsed in June, has been inching up. Russia’s February invasion of Ukraine already caused a massive run-up in energy and gas prices this year, and White House officials are [said](https://www.washingtonpost.com/business/2022/08/26/fed-powell-jackson-hole/?itid=lk_inline_manual_30) in a closely watched speech last month. Fed watchers and the financial markets increasingly expect ... But travel may actually escape a lot of what’s happening in the economy because there’s such pent-up demand.” The Fed’s goal is to use higher rates to dampen demand in the economy, especially since its tools can’t do anything to fix issues like supply chain logjams, worker shortages or the war in Ukraine. Still, the Fed has sent a clear message: it is pressing on. “We thought we’d see inflation start to come down, and instead what we’ve seen is inflation really sort of entrenched,” said Betsey Stevenson, professor of public policy and economics at the University of Michigan and a former member of the White House Council of Economic Advisers. Costs for housing, medical care, new cars and household furnishings were all up compared to the month before. The stock market fell sharply on the news, as investors fretted that the new data would embolden Federal Reserve officials to continue raising interest rates next week in an effort to slow inflation down. The Fed and some economists prefer to focus on a measure of inflation known as “core inflation," which strips away more volatile categories like food and energy. It showed that prices were up 8.3 percent in August compared to 12 months earlier, higher than analysts expected.

Investors, analyst and economists alike received a harsh reality check on Tuesday as inflation for the month of August topped expectations and sent US ...

The S&P 500 Index slumped as much as 2.7%, putting it on track to snap its longest winning streak in more than two months, while the tech-heavy Nasdaq 100 Index sank 3.6%. Stocks had rallied in recent days as economists anticipated Labor Department data would show another sizable deceleration in US consumer price growth. Investors, analyst and economists alike received a harsh reality check on Tuesday as inflation for the month of August topped expectations and sent US stocks tumbling by the most more than two weeks.

Stocks started Tuesday sharply lower, after fresh data showed August U.S. inflation growth broadly lower than in July, though higher than economists had ...

Read more about the CPI data here.\n\nThe S&P 500 opened down 2.1%. The Nasdaq Composite was down 2.7%. The Dow industrials were off 1.6%, or more than 500 points.

It takes time for falling prices to feed into the consumer price index. Will that time be October?

The BLS view of the economy is likely to catch up to reality in the next few reports, which should show that US inflation is really starting to cool. The car market’s slowdown is likely to show up in future reports. The bureau’s next CPI report is due on Oct. Prices rose by 0.1% last month, according to the Bureau of Labor Statistics (BLS), whereas economists had expected inflation to fall by 0.1%. Economists had based their forecasts on declining prices for gas, used cars, and retail goods, which have shown up in other reports. [record-breaking drop](https://www.autoremarketing.com/wholesale/manheim-index-makes-nearly-record-breaking-drop-august)as measured by the Manheim Index.

U.S. consumer prices rise more than expected in August · Traders price in a small chance of 100 bps rate hike · Indexes down: Dow 1.87%, S&P 2.30%, Nasdaq 3.07%.

The small cap Russell 2000 index [(.RUT)](https://www.reuters.com/quote/.RUT) dipped 2.9%. But now, it seems like the destination is now a little bit more in question," said Brian Jacobsen, senior investment strategist, Allspring Global Investments. [(.SPXBK)](https://www.reuters.com/quote/.SPXBK) dropped 2.8%. 20-21 meeting, while expecting rates to peak at around 4.28% in March 2023. [(.DJI)](https://www.reuters.com/quote/.DJI) was down 848.07 points, or 2.62%, at 31,533.27, the S&P 500 [(.SPX)](https://www.reuters.com/quote/.SPX) was down 122.57 points, or 2.98%, at 3,987.84, and the Nasdaq Composite [(.IXIC)](https://www.reuters.com/quote/.IXIC) was down 470.90 points, or 3.84%, at 11,795.51. [(.VIX)](https://www.reuters.com/quote/.VIX), also known as Wall Street's fear gauge, rose to 25.74 points. [(AAPL.O)](https://www.reuters.com/companies/AAPL.O), Microsoft Corp [(MSFT.O)](https://www.reuters.com/companies/MSFT.O) and Tesla Inc [(TSLA.O)](https://www.reuters.com/companies/TSLA.O) dropped 4.1% each, while Alphabet Inc [(GOOGL.O)](https://www.reuters.com/companies/GOOGL.O), Amazon.com Inc [(AMZN.O)](https://www.reuters.com/companies/AMZN.O) and Meta Platforms Inc [(META.O)](https://www.reuters.com/companies/META.O) slid between 4.8% and 7.4%. Excluding the volatile food and energy components, core CPI increased to 6.3% from 5.9% in July. [(.SPLRCL)](https://www.reuters.com/quote/.SPLRCL). [The Thomson Reuters Trust Principles.](https://www.thomsonreuters.com/en/about-us/trust-principles.html) [(.IGX)](https://www.reuters.com/quote/.IGX), which houses rate-sensitive technology and growth shares, fell 3.8% as Treasury yields rose, while its value counterpart [(.IVX)](https://www.reuters.com/quote/.IVX) lost 2.2%. [read more](/markets/us/monthly-us-consumer-prices-unexpectedly-rise-august-core-inflation-picks-up-2022-09-13/)

Rates traders are now betting the Federal Reserve will lift its benchmark rate by at least three-quarters of a percentage point next week, with some chatter ...