US: CPI

Date: Friday 24 October at 10.30pm AEST

For August, headline inflation in the US increased by 0.4%, in line with expectations. This saw the annual rate of headline inflation rise to 2.9%, below the forecast of 3%.

The annual core CPI, which excludes volatile items like food and energy, rose by 0.3% month-on-month (MoM), which kept the annual core inflation rate steady at 3.1%, unchanged from July, and in line with market expectations.

For September the expectation is for the annual headline inflation rate to rise to 3.1% YoY, which would be its highest reading since May 2024, and for the core measure to remain at 3.1% YoY.

Ahead of this, the US interest rate market is fully priced for a 25 bp Federal Reserve (Fed) cut in October and fully priced for another 25 bp cut in December, as the Fed prioritises supporting a cooling labour market amid persistent inflation concerns.

US Core inflation ratechart