US Core CPI accelerates to 2.4% monthly rise, pushing Fed rate hike odds to 86%
US core inflation surged 0.3% in August at a pace of 2.4%, confirming market expectations for Federal Reserve interest rate increases.
The US Bureau of Labor Statistics reported that Core CPI increased 0.3% in August, surpassing the forecasted 0.2%. The year-over-year reading stood at 2.4%, the lowest annual pace since early 2021 but the fastest monthly rise in three months. Prices jumped 0.4% compared to a 0.1% increase in July. Investors interpreted these figures as reinforcement for further monetary tightening. The probability of the Federal Reserve raising interest rates by 25 basis points at the September 16 meeting climbed to 86%, up from roughly 72% the day before. Juan Perez, director of trading at MonexUSA, noted that accelerating Core CPI typically increases the odds of a rate hike. US equity markets closed higher despite the inflation data, with the S&P 500 gaining 1%. Bitcoin traded near $80,000 after returning to that price level following the release.
