US inflation measured by the consumer price index slowed in August to an annual rate of 8.3%, compared to + 8.5% in July. However, the weakening of the CPI index took place at a slower pace than expected by the consensus of analysts, who had forecast an increase of + 8.1%. On a monthly basis, headline inflation rose by 0.1%, strengthening compared to the unchanged figure in July, and confirming a growth even in this case higher than the analysts’ estimates, which were for a decline of 0.1%.
The core component also jumped by 6.3% on an annual basis, strengthening with respect to + 5.9% in July, over the estimated + 6.1%; on a monthly basis, the core CPI index rose 0.6%, over the estimated + 0.3% and double the previous + 0.3% in July.
The numbers undermine hope that US inflation has peaked, and thus fuel fears that the Fed will continue on its path of aggressive rate hikes.
In a context in which the Federal Reserve is doing everything to put a stop to the inflation flare-up, with massive rate hikes, its chairman Jerome Powell will pay close attention to the CPI index, ahead of the next Fed meeting, which will make its rate announcement on 21 September.
Economists are betting on a new monetary tightening of 75 basis points.
The likelihood of a new maxi rate hike has further increased, prior to the release of the figure, rising to 90%, according to CME Group’s FedWatch, which monitors the trend in fed funds futures, up from 69% two weeks ago.