Will August’s Inflation Report Lead to a Major Fed Rate Cut? 

2024-09-12 | CPI ,Inflation

Inflation is once again a key focus for financial markets, as it could determine the next move by the Federal Reserve on interest rates. Previously, job market data was the main factor, but now, all eyes are on the upcoming inflation report for August. 

Consumer Price Index (CPI) Data: A Potential Game-Changer

This Wednesday’s Consumer Price Index (CPI) data might be the tipping point for whether the Fed decides on a larger-than-usual rate cut of 50 basis points on September 18. The last time the Fed cut rates by that much was during the 2008 financial crisis. 

Market Speculation: The Impact of Lower-than-Expected Inflation

Investors are now wondering if lower-than-expected inflation on Wednesday could signal a half-percentage-point rate cut—and whether that’s good or bad news. The latest job report showed fewer jobs added than anticipated, which further complicates predictions about the Fed’s next move. 

Economists at Wells Fargo suggest that while a 50-basis-point cut is likely, a smaller 25-basis-point reduction is still a possibility. 

Stock Market Reaction: Concerns of an Economic Slowdown

Adding to the uncertainty, concerns about a potential economic slowdown caused U.S. stocks to drop sharply last Friday, leading to the worst start to September for the Dow, S&P 500, and Nasdaq in over a decade. 


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Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it. 
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution. 

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