CPI Report to Set Stage for Fed's Interest Rate Decision

The Consumer Price Index (CPI) is set to be released today at 8:30 am ET, providing crucial information for the Federal Reserve's upcoming meeting on September 15-16. The August CPI report will give the Fed its last major inflation snapshot before making a decision on interest rates.

July's CPI rose 0.1% month-over-month and 3.4% year-over-year. Economists expect a firmer headline reading of around 0.4% month-over-month, with the annual rate little changed at 3.3-3.4%. The debate will focus on whether core inflation is still fading or re-accelerating.

Markets are positioned for a 25 basis-point interest rate hike next week, but economists remain cautious, and some experts believe a hold is more likely. The Fed's own voting members are split, with three members already advocating for tighter policy.