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Real-time News
September 11th - Data shows that the US annual inflation rate remained high last month, with Americans continuing to pay high gasoline prices. Previously, a slowdown was widely expected, allowing the Federal Reserve to cut interest rates. However, the war with Iran and the resulting sharp rise in energy prices have changed this. According to data from the American Automobile Association (AAA), the average price of regular gasoline in August was $4.07 per gallon, compared to $3.16 a year ago. This month, the escalating conflict with Iran pushed up energy prices—the average price of regular gasoline was $4.30 on Friday. The August inflation data has significant implications for the Federal Reserve, which is deeply divided on whether to raise interest rates at next weeks policy meeting. At the Feds last meeting in July, three officials voted against raising rates, and others have since indicated they might join in if inflation does not improve. Adding to inflationary pressures is the shortage of memory and storage chips caused by the development of artificial intelligence, which is driving up the prices of some consumer electronics. For example, Apple is raising prices to offset higher costs. The companys new foldable phone, released this week, starts at $1,999.On September 11th, data from the U.S. Bureau of Labor Statistics on Friday showed that the core CPI, excluding food and energy, rose 0.3% month-over-month and 2.4% year-over-year. Driven by rising energy prices, the overall CPI rose 0.4% month-over-month and 3.4% year-over-year. The report indicated that facing continued pressure from the Iran war, tariffs, and data center construction, inflation made little progress toward the Federal Reserves target last month. Previously, some officials had hinted that the decision on September 15-16 would depend on data performance; given this data, the Fed is likely to consider it a catalyst for its first interest rate hike in three years. As investors increased their bets on a rate hike, U.S. Treasury yields rose, and stock index futures remained high. Fed Chairman Warsh had previously been reluctant to reveal the Feds intentions for its next move. Meanwhile, the U.S. economy is facing the challenge of a rebound in energy prices due to supply disruptions caused by the Middle East conflict and the Russia-Ukraine war. This week, oil prices broke through $100 per barrel, and U.S. retail diesel prices also hit a record high.September 11th - U.S. consumer prices accelerated in August as gasoline costs rebounded after two consecutive months of decline, strengthening financial markets expectations that the Federal Reserve may raise interest rates next week. The U.S. Bureau of Labor Statistics said on Friday that the Consumer Price Index (CPI) rose 0.4% month-over-month last month, following a slight increase of 0.1% in July. Consumer inflation rose 3.4% in the 12 months ending in August, unchanged from July. The seasonally adjusted core CPI rose 0.3% month-over-month in August, higher than the market expectation of 0.2%. Thursdays data already showed a rise in the Producer Price Index (PPI) in August, with several key components showing strong increases, which are included in the PCE inflation calculation. This, coupled with last weeks strong August jobs report, further boosted market expectations for a rate hike next week. After the release of the U.S. August CPI data, the market estimated a roughly 90% probability of a Fed rate hike next week.The market fully expects the Federal Reserve to raise interest rates twice before the end of the year.September 11 - Following the release of the US August CPI data, the market expects a 90% probability of a Federal Reserve rate hike next week.
