Live Coverage: US CPI inflation awaited with angst after market turmoil

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Inflation

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 Premiumto ask analysts questions live, leverage actionable analysis and get Gold and signal alerts. Why CPI inflation draws so much attention The Federal Reserve has been fighting inflation in the pat few years, and the Consumer Price Index 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.

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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