Will today’s inflation report be the game-changer we’ve been waiting for? With stock futures showing caution and the market holding its breath, all eyes are glued to the data release that could shake up the landscape.
As we gear up for the release of the August consumer inflation report at 8:30 a.m. ET, analysts are expecting the headline inflation rate to cool down to 2.5%, a noticeable drop from July’s 2.9% annual jump. Meanwhile, the month-over-month consumer prices are predicted to remain stable with a 0.2% rise—consistent with what we saw in July.
Why does this matter? A lot rides on this report. The Federal Reserve’s strategy on interest rates could pivot based on these numbers. If inflation moderates, it might pave the way for a rate cut in their September meeting. But don’t pop the champagne just yet—if core inflation remains high, driven by relentless housing and service costs, the Fed might hold its horses.
Louis Navellier, a well-known fund manager, is hopeful. He anticipates a positive CPI report that could lead to lower Treasury yields.
If we see shelter costs continue to moderate, it will be a strong signal for lower yields
Louis Navellier
On the flip side, strategist Mark Newton expects a market pullback before the Fed’s September 18 meeting. But this isn’t a doom-and-gloom scenario. Newton maintains that strong earnings and market sentiment will fuel a recovery post-Fed meeting.
Despite the expected dip, the market’s fundamentals are strong enough to bounce back post-Fed meeting
Mark Newton
Investors are currently in a wait-and-see mode. Some anticipate a pullback, preparing for a potential decline ahead of the Fed’s decision. Others are banking on a positive CPI report to boost the possibility of a significant rate cut. The market is on edge, split between caution and optimism—each faction ready to seize the moment as the data rolls in.
Here’s your rapid-glance guide to the vital economic indicators:
| Data Point | Current Value | Expected Value | Previous Value |
|---|---|---|---|
| August CPI | 2.5% | 2.6% | 2.9% (July) |
| Monthly CPI Increase | 0.2% | 0.2% | 0.2% (July) |
| Core CPI (year-over-year) | 3.2% | 3.2% | 3.2% (July) |
| Federal Reserve Interest Rate Cut | 67.0% (25bps), 33.0% (50bps) | 73.0% (25bps), 27.0% (50bps) | – |
| Euro Stoxx 50 Futures | +0.10% | – | – |
| September S&P 500 E-Mini Futures (ESU24) | -0.07% | – | – |
| September Nasdaq 100 E-Mini Futures (NQU24) | -0.27% | – | – |
The stakes are sky-high, and today’s CPI report is set to be a pivotal moment. Stay tuned—this could be the market shake-up we’ve all been waiting for.
