by The consumer price index, published by the Bureau of Labor Statistics, rose 2.5% over the year from August 2023 to last August. That was in line with the 2.5% forecast and below the 2.9% rate in July.
The new consumer price index data will likely play a role in the Federal Open Market Committee’s rate call in a week. A rate cut is almost certain to happen this month, based on expectations from traders and economists, and the biggest questions are how big and fast the cuts will be for the rest of the year.
Softening but still relatively strong labor market data will also weigh on the Fed’s decision. Bureau of Labor Statistics data released last Friday showed the unemployment rate fell to 4.2% in August from 4.3% in July, and monthly job growth has cooled over the summer.
“The question will be whether the totality of the data, the changing outlook and the balance of risks are consistent with increasing confidence in inflation and maintaining a solid labor market,” Fed Chair Jerome Powell said in a July press conference after the FOMC’s decision on policy rates. “If that test is met, a cut in our policy rate could be on the table as early as our next meeting in September.”
Powell also said at that conference that “we will be dependent on the data, but not on the data points. So it’s not going to be a case of us reacting specifically to one or two data releases.”
This is a developing story. Check back for updates.