Like Ukraine's tactics, so has the the price at the pump diverted attention from everything else – and everything else is rising in price. The Core Consumer Price Index has shocked markets with a leap of 0.6% in August vs. 0.3% expected and 0.3% last month.
Hot August inflation data reaffirm Fed's hawkish outlook
The US Bureau of Labor Statistics reported this Tuesday that inflation, as measured by the Consumer Price Index (CPI), decelerated to 8.3% on a yearly basis in August from 8.5% in the previous month. The reading was slightly above consensus estimates pointing to a decline to 8.1%.
July CPI REVIEW
The fog around peak inflation has cleared – at least until the Federal Reserve announces its verdict. The US CPI report showed a considerable moderation in inflation, Core CPI rose by only 0.3% in July, significantly less than 0.5% expected. On a yearly basis, it stayed at 5.9% – cresting.
Inflation in the United States, as measured by the Consumer Price Index (CPI), declined to 8.5% on a yearly basis in July from 9.1% in June, the data published by the US Bureau of Labor Statistics revealed on Wednesday.
June CPI REVIEW
Crowded trade? Not a problem. The US dollar has received another good reason to attract flows. US inflation has hit 9.1% YoY, yet another four-decade high. The price at the pump is eroding Americans' disposable income – but prices are rising almost everywhere.
Inflation in the US, as measured by the Consumer Price Index (CPI), jumped to its highest level in four decades at 9.1% on a yearly basis in June from 8.6% in May, the data published by the US Bureau of Labor Statistics showed on Wednesday.
The main US equity indices reacted negatively to the higher-than-expected US CPI data. The two key components the market was focusing on were the yearly CPI which came in at 9.1% versus 8.8% expected and the core number which was 5.9% versus 5.7% expected.
What is the US CPI?
The Consumer Price Index released by the US Bureau of Labor Statistcs is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of USD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish).
Why it matters to traders?
The US Federal Reserve has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.