Inflation
The latest data on inflation shows the Federal Reserve’s efforts in reducing prices seems to be working. This week, a report outlined the direction of prices and it showed to slow down inflation back to 2021 levels. This is good news for inflation but may impact the Federal Reserve’s policy decisions in September as the numbers do not show a steep drop in prices. It’s entirely possible the Federal Reserve will not reduce rates by half a percent as some predicted but instead stick to a quarter percent. We will wait and see.
We will watch the Federal Reserve behavior carefully. The belief is at least this week, the Fed will lower rates, but the intensity of the drop remains to be seen. We will likely see significant fluctuation in markets until the Fed’s policy action becomes clearer.
Recent CNBC article highlighted the latest inflation report. Excerpts are provided here.
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“Inflation in August declined to its lowest level since February 2021, according to a Labor Department report Wednesday that also showed a key measure higher than expected, setting the stage for an expected quarter percentage point rate cut from the Federal Reserve.
The consumer price index, a broad measure of goods and services costs across the U.S. economy, increased 0.2% for the month, in line with the Dow Jones consensus, the Bureau of Labor Statistics reported.”
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Source: https://www.cnbc.com/2024/09/11/cpi-inflation-report-august-2024-.html
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