New York, September 12 (Patrika English News): U.S. consumer prices rose more than expected in August, with annual inflation hitting a seven-month high. However, analysts say the data is unlikely to derail the Federal Reserve’s expected rate cut next week as labor market signals continue to weaken.
The Consumer Price Index (CPI) rose 0.4% in August after a 0.2% gain in July, the Bureau of Labor Statistics reported Thursday. On a year-on-year basis, CPI advanced 2.9%, up from July’s 2.7%.
Market reaction
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Stocks: U.S. stock futures extended gains.
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Bonds: Treasury yields slipped, with the 10-year yield flat at 4.028%.
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Forex: The dollar index eased to 97.75.
Expert views
Oliver Pursche of Wealthspire Advisors said the data reinforces expectations of a rate cut, though the probability of a larger 50 basis point move remains low. “It certainly seems like ‘bad news is good news’ is back,” he said.
Brian Jacobsen of Annex Wealth Management noted that shelter costs remain the main driver of services inflation, which the Fed often overlooks. He added that retirees should watch closely, as Social Security benefits are indexed to CPI changes in the third quarter — pointing to a likely 2.7% cost-of-living adjustment for 2026.
Gary Schlossberg of Wells Fargo Investment Institute said inflation is “firming in a way the market can digest,” adding that a 25 basis point cut remains the base case, with one or two more possible before year-end.