Inflation Spikes Beyond Forecasts To 3.7% In August, Forces Markets To Rethink Fed Policy
Portfolio Pulse from Piero Cingari
The annual Consumer Price Index (CPI) inflation rate rose from 3.2% in July to 3.7% in August 2023, surpassing economist expectations of a 3.6% increase. The primary driver of the monthly increase was the gasoline index, up 10.6% month-on-month. The core CPI decreased from July’s 4.7% to 4.3% year-on-year in August. The higher-than-expected inflation data has led to speculation about the Federal Reserve's future actions. Prior to the CPI data release, the market had been pricing in a 93% probability the Federal Reserve would refrain from raising interest rates during its Sept. 20 meeting.
September 13, 2023 | 1:04 pm
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NEGATIVE IMPACT
The SPDR S&P 500 ETF Trust (NYSE:SPY) may be impacted by the higher-than-expected inflation data, as it could lead to changes in the Federal Reserve's policy.
The higher-than-expected inflation data could lead to changes in the Federal Reserve's policy, which could impact the overall market and thus the SPDR S&P 500 ETF Trust (NYSE:SPY).
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 75
NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (NYSE:UUP) may be impacted by the higher-than-expected inflation data, as it could lead to changes in the Federal Reserve's policy.
The higher-than-expected inflation data could lead to changes in the Federal Reserve's policy, which could impact the value of the US dollar and thus the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP).
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 75