Inflation Stagnant, Interest Rate Cut Expected Next Week

Inflation was stagnant for August, with the increase at 0.2% over July but up only 2.5% over the last 12 months, the smallest 12-month increase since February 2021. The energy index decreased 4% over the last 12 months while the food index is up 2.1% over the last year. Increases for shelter remain stubbornly high with the increase at 0.5% for August and the main driver in overall increase in the month and accounting for 70% of the annual increase. In addition to energy, some categories have begun to drop, with used cars and trucks seeing a 10.4% decrease over the past year. Click here for the press release. 

While inflation continues to remain above the Federal Reserve’s 2% annual inflation target, as the annual CPI inches closer to this target, and the employment picture continues below estimates, the agency is expected to reduce interest rates at their meeting next week.