CPI Report: August Inflation Print to Shape Fed Decision

The US Consumer Price Index (CPI) report for August is set to be released today at 8:30 am ET, and its impact on stocks, bonds, the US dollar, and the Federal Reserve's upcoming decision will be significant.

This report is crucial as it is the last major inflation print before the Fed votes in September. The Bureau of Labor Statistics' data will provide insight into whether underlying pressure is still fading or re-accelerating.

Markets have been leaning towards a 25 basis-point interest rate hike next week, but economists remain cautious, with some expecting a hold even as the share of those anticipating at least one hike this year has risen. The Committee itself is split, and Chair Kevin Warsh's new Summary of Economic Projections may also play a role.

Regardless of the outcome, markets will closely watch the composition of the CPI report, including core goods versus services, rents, airfares, insurance, used cars, and any impact on the Fed's preferred PCE gauge later this month.