Analyst: If the August CPI data does not show a significant increase, the Fed is expected to cut interest rates by 25 basis points.

By: theblockbeats.news|2025/09/11 05:30:14

BlockBeats News, September 11th: The US August CPI data will be released tonight at 20:30. The market currently prices in a 100% probability of a Fed rate cut next Wednesday, especially after the unexpected drop in August producer prices and weak US job growth. The only remaining question now is the size of the rate cut, and if Thursday's CPI data comes in higher than expected, how officials will react to further easing later this year. Meanwhile, businesses are absorbing some of the tariff costs from the Trump administration's trade policies, which has partially alleviated inflation pressure.


Economists expect that after accounting for a 0.3% monthly increase, the overall August CPI year-on-year increase will tick up slightly from July's 2.7% to 2.9%. The core CPI, which excludes food and energy, is expected to remain unchanged at a year-on-year 3.1% and monthly 0.3% increase.


Russell Investments Senior Strategist BeiChen Lin stated that a "very significant" upside surprise would be needed to prevent a 25 basis point rate cut by the Fed next week. However, even moderate above-forecast data would be enough to make officials express concerns about future price rises while cutting rates. The "core services" category in the CPI report is worth paying attention to.

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