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US Inflation Softens Significantly as Fed Considers Interest ...
2024-09-11 23:55:08
Economy
Inflation
Markets

US Inflation Softens Significantly as Fed Considers Interest Rate Cut

US inflation has eased to its lowest level since February 2021, prompting the Federal Reserve to potentially cut interest rates. With the consumer price index rising by 2.5% annually and core CPI increasing by 0.3% monthly, the US economy faces vital decisions ahead, especially regarding the cost of living, which has become a crucial election issue.

Despite the recent peak of 9.1% inflation in June 2022 and the Federal Reserve's significant policy changes, aiming for a 'soft landing', signs of an economic slowdown are emerging. Furthermore, the easing inflation, highlighted by the August CPI data, could lead to potential Federal Reserve rate cuts, potentially benefiting cryptocurrencies amidst a shifting economic landscape.

Related news on that topic:

Inflation in the US eases ahead of potential interest rate hike

The inflation rate in the US fell to 2.5 percent in August, aided by a base effect. Analysts expect a 25 basis point rate cut by the US Federal Reserve (Fed), as the labor market and inflation show signs of weakening. The benchmark interest rates are currently at the highest level since 23 years. US inflation hit a 2.5% annual rate in August, the lowest since 2021. This paves the way for the Federal Reserve to cut rates, likely by 0.25 or 0.50 points. Core inflation remains elevated at 3.2%, but falling energy and food prices drove the overall decline. The Fed will also publish forecasts on where the federal funds rate should be by year-end. Inflation has eroded Biden's popularity. The Fed has shifted focus from its mandate of price stability to ensuring maximum employment, after the most aggressive rate hikes since the 1980s. The Federal Reserve is set for a 0.25% rate cut next week. August CPI rose 3.2%, with housing and shelter as key factors, keeping the Fed on a measured path.

U.S. Core Inflation Rose 0.3% in August, Leading to Rate Cut ... Cut Speculation

U.S. core inflation rose 0.3% in August, faster than expected, likely leading to a 25 basis point Fed rate cut next week. CPI rose 2.5% year-over-year, while core CPI was 3.2%. Expectations for the Fed to cut rates by 25 basis points next week jumped to 85%. The dollar index rose 0.15% and gold price dipped 0.45%. Bitcoin, U.S. stocks, and Treasury yields fell following the report. The consumer price index for August increased by 0.2%, while core inflation remained steady at 3.2%. The Federal Reserve may exercise patience in lowering borrowing costs due to the steady core prices. The inflation rate in the U.S. dropped to 2.5% in August, its lowest since 2021, with the gas and food prices being contained. However, the underlying inflation rate remains at 3.2%, indicating ongoing efforts to control prices. The report matched economists' expectations, but the market reaction was mixed. US stock futures fell as investors assessed August inflation data, with core prices rising more than expected, reducing odds of a 50 basis points Fed rate cut. Bitcoin prices may drop by up to 20% if the Fed cuts interest rates, according to Bitfinex analysts.

Read 24 more recent news on this topic

The press radar on this topic:

The Street
28. September 2024 um 12:51

How Soft is the US Labor Market?

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US unemployment rose, triggering Sahm Rule; consumer spending and retail sales strong; wage growth cooling; job cuts low; jobless claims improving; pandemic savings depleted, more reliance on credit cards; Fed expected to cut rates soon.
CoinDesk
11. September 2024 um 18:12

Slowing Inflation Growth Points to More Upside in Crypto

Economy
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Slowing inflation growth, as shown by August CPI data from the U.S. Bureau of Labor Statistics (BLS), could signal Federal Reserve rate cuts before their September 17-18 monetary policy meeting, boosting crypto. The CPI gauge, Beige Book survey, and employment growth numbers from the Dallas, Kansas City, New York, and Philadelphia Federal Reserve Banks, which cover 25% of national economic output, suggest a dovish stance. CPRI, a proprietary inflation gauge, began stabilizing before CPI, indic..
The Guardian
11. September 2024 um 12:35

US inflation softens to lowest level since February 2021 as Fed prepares to cut interest rates

Economy
Politics
Finance
US inflation softened to lowest level since February 2021 as Fed prepares to cut interest rates. Consumer price index rose 2.5% annually, core CPI rose 0.3% monthly. US economy at a crossroads, cost of living key election issue. Fed's U-turn, hikes to two-decade high; inflation peaked at 9.1% in June 2022. Fed's 'soft landing' goal; signs of economic slowdown.
Yahoo News
11. September 2024 um 17:31

Why are prices still high if the inflation rate is dropping?

Economy
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The Federal Reserve could cut interest rates during its Sept. 18 meeting after months of no change. CBS News business analyst Jill Schlesinger breaks down why consumer prices remain high despite inflation dropping to its lowest level since early 2021.
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