Live Coverage: US CPI inflation awaited with angst after market turmoil
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CLAIM OFFERWill US inflation justify a 50 bps rate cut in September? Fears of an imminent US recession creeped into markets, and investors need a soothing report.
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Why CPI inflation draws so much attention
The Federal Reserve (Fed) has been fighting inflation in the pat few years, and the Consumer Price Index (CPI) report is the first piece of hard evidence about price developments. The central bank focuses on core CPI, which excludes volatile energy and food prices. Core CPI MoM is the most market-moving release.
The CPI report for July comes after several turbulent weeks in markets. Investors fear a US recession following the downbeat Nonfarm Payrolls (NFP) report which showed a bump up in the unemployment rate to 4.3%. The Sahm Rule, which is a time-tested empirical tool predicting recession using the unemployment rate, was triggered. However, the rule's originator, Claudia Sahm, played down its importance in current circumstances.
A drop in inflation would provide the Fed more confidence to cut rates, lowering the chances of a downturn. Hotter prices would disappoint markets and could trigger another crash. Many market participants are on holiday in August, meaning outsized responses to incoming data.
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Will US inflation justify a 50 bps rate cut in September? Fears of an imminent US recession creeped into markets, and investors need a soothing report.
Join FXStreet Premium to ask analysts questions live, leverage actionable analysis and get Gold and signal alerts.
Why CPI inflation draws so much attention
The Federal Reserve (Fed) has been fighting inflation in the pat few years, and the Consumer Price Index (CPI) report is the first piece of hard evidence about price developments. The central bank focuses on core CPI, which excludes volatile energy and food prices. Core CPI MoM is the most market-moving release.
The CPI report for July comes after several turbulent weeks in markets. Investors fear a US recession following the downbeat Nonfarm Payrolls (NFP) report which showed a bump up in the unemployment rate to 4.3%. The Sahm Rule, which is a time-tested empirical tool predicting recession using the unemployment rate, was triggered. However, the rule's originator, Claudia Sahm, played down its importance in current circumstances.
A drop in inflation would provide the Fed more confidence to cut rates, lowering the chances of a downturn. Hotter prices would disappoint markets and could trigger another crash. Many market participants are on holiday in August, meaning outsized responses to incoming data.
Live financial market coverage
FXStreet covers major economic releases in a live blog format, to provide readers an instant verdict of the data, rapid analysis of key assets, and for Premium members, the abilty to ask our experts questions in real time.
FXStreet Premium
FXStreet Premium provides subscribers access to analysts, exclusive actionable analysis, signals, Ed Ponsi's webinars, trade plans and a bullish/bearish indicator for Gold on critical events. Join FXStreet Premium here.
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