Core CPI rose a faster-than-forecast 0.3% in August, setting up possible Fed rate hike
The U.S. Consumer Price Index rose 0.4% in August, with core inflation increasing by a faster-than-expected 0.3%. The data has triggered market expectations of a potential Federal Reserve interest rate hike at the upcoming policy meeting.
Why it matters
Higher-than-anticipated core inflation increases the likelihood of aggressive monetary tightening, which typically pressures risk assets like bitcoin and influences broader Treasury yield volatility.
The Consumer Price Index rose 0.4% in August, in line with economist forecasts of 0.4% and July’s 0.1% increase.
On a year-over-year basis, headline CPI rose 3.4%, versus expectations of 3.4% and July’s 3.4% reading.
Core CPI, which excludes volatile food and energy prices, increased 0.3% month over month, faster than forecasts of 0.2% and July’s 0.2% rise.
On an annual basis, core inflation came in at 2.4%, in line with expectations of 2.4% and July’s 2.5%.
The price of bitcoin BTC $ 77,057.36 dipped back to $76,700 in the minutes following the news.
The two-year Treasury yield jumped six basis points to 4.61% as traders began to assign nearly a 100% chance the Fed will hike rates at its policy meeting next week. The 10-year yield — less closely tied to Fed policy — was flat at 4.95%.
Nasdaq 100 futures rose to a session high, up 0.8%.
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