Cooler inflation reading helps the case for a Fed rate cut in September
What recent CPI data influenced Fed rate cut probabilities?
The latest Consumer Price Index (CPI) data, which showed a cooler inflation reading, influenced the Fed rate cut probabilities. Traders now price in an 83% probability of an easing at the Fed's meeting on September 17-18.
How did June's core CPI compare to May's figures?
In June, the core CPI, which excludes volatile food and energy prices, increased by 0.1% after rising 0.2% in May. This resulted in a year-over-year increase of 3.3% in June, down from 3.4% in May, marking a fresh three-year low3.
What is the Fed's inflation goal percentage?
The Federal Reserve's inflation goal percentage is 2%. This target is based on the annual change in the price index for personal consumption expenditures6. The Fed aims to maintain this level of inflation over the longer run as it is most consistent with their mandate for maximum employment and price stability.