August CPI Data to Test Market Expectations for US Interest Rate Hikes

The upcoming US Consumer Price Index (CPI) release for August is expected to significantly influence market expectations regarding interest rate hikes by the Federal Reserve. The data will be released on Friday, September 11, and could directly impact whether the Fed raises rates in September.

Market analysts anticipate a month-over-month increase of 0.4% in headline CPI, surpassing July's 0.1%. Year-over-year growth is expected to remain at 3.4%. Core CPI, which excludes food and energy prices, is projected to rise by 0.2%, with year-over-year growth slowing from 2.5% to 2.4%.

The recent surge in international oil prices has led to a significant increase in energy costs, potentially driving up headline inflation. However, core inflation expectations have not risen in tandem, indicating that underlying inflation may continue to cool slowly.