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The Most Important Thing Today (8/16/23)

The Most Important Thing Today (8/16/23)

Let's talk about inflation!

On a Monthly Basis, Core Inflation Core Remains Subdued for the Second Month in a Row

 

 
  • In July, both headline and core CPI rose 0.2%, marking the smallest back-to-back gains in core CPI in over two years. While housing costs continue to contribute significantly to overall services inflation as well as overall CPI, used-car prices and airfares decreased.
  • The report increases the likelihood of the Federal Reserve keeping rates unchanged at the next meeting on September 19-20. However, one more inflation report is due before the meeting.
  • Rising oil prices could cause a spike in August's headline CPI, though the Federal Reserve may be likely to overlook this due to decreased inflation expectations.
  • However, policymakers remain divided on rate hikes, with one group believing past rate hikes have been effective, while another group fears stopping too soon could lead to a resurgence in inflation.

Source: Helios Quantitative Research, Bloomberg, Bureau of Labor Statistics

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