Higher oil prices were behind the big rise in headline inflation last month.
The Consumer Price Index (CPI) for August rose 0.6%, in line with economist expectations for 0.6% and up from 0.2% in July. On a year-over-year basis, CPI inflation rose to 3.7% versus forecasts for 3.6% and from 3.2% a month earlier.
The core CPI – which strips out food and energy costs – rose 0.3% versus economist expectations for 0.2% and against 0.2% a month earlier. On a year-over-year basis, core CPI fell to 4.3%, in line with economist forecasts and down from 4.7% in July.
The price of bitcoin (BTC) was little-changed at $26,100 in the minutes following the news.
Surging oil prices – WTI crude oil rose to its highest levels of 2023 in August (the move continuing into September) – were a major factor in the rise of headline inflation last month. The U.S. Federal Reserve, though, will likely take comfort in the continuing decline in core inflation rate, which fell to its weakest pace since mid-2021.
The Fed’s September policy meeting takes place next week and the central bank is widely expected to leave its benchmark fed funds rate unchanged at 5.25%-5.50%. Focus will soon turn to the Fed’s next meeting at the start of November. Markets are currently pricing in about a 40% chance the policymakers hike rates then, according to the CME FedWatch Tool.
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Source: Vietnam Insider