The U.S. saw a higher-than-expected Consumer Price Index increase in August, but it will not prevent the Federal Reserve from cutting interest rates next week.
BlockBeats News, September 11th: In the U.S., the August CPI increase was higher than expected, and the inflation rate saw its largest year-on-year gain in seven months. However, it is expected that these data will not prevent the Fed from cutting interest rates next week due to weakness in the labor market. Thursday's data showed that after a 0.2% rise in July, the CPI rose by 0.4% in August. Over the 12 months ending in August, the CPI rose by 2.9%, the largest increase since January, with July seeing a 2.7% increase.
Following recent gloomy news from the labor market, the CPI report may trigger concerns about stagflation. The impact of U.S. President Trump's comprehensive tariff imposition has been gradual, but prices may accelerate in the coming months as businesses have now depleted their pre-tariff inventories.
For some time, business surveys have been suggesting an imminent price increase. Stephen Stanley, Chief Economist for U.S. Capital Markets at Santander Bank, stated: "There is ample evidence to suggest that more tariff-related inflation is on the way, although this may take several months to fully pass through." (FXStreet)
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