In the month of August, the Consumer Price Index (CPI) experienced a 0.6% ascent, aligning precisely with economists’ projections of 0.6%, marking a notable increase from July’s 0.2%. On a year-over-year basis, CPI inflation surged to 3.7%, surpassing forecasts of 3.6% and exceeding the 3.2% recorded a mere month earlier.
Concurrently, the core CPI, which meticulously excludes expenditures related to sustenance and energy, exhibited a 0.3% elevation, outpacing economists’ expectations of 0.2%. This stands in stark contrast to the preceding month’s 0.2%. On an annual basis, the core CPI exhibited a decline to 4.3%, in perfect accordance with economists’ prognostications, as opposed to the previous 4.7% figure recorded in July.
During the moments immediately following this news, the valuation of bitcoin (BTC) remained relatively static, with a slight deviation, settling at $26,100.
The meteoric ascent of oil prices played a pivotal role in the substantial upsurge in headline inflation witnessed last month. Notably, WTI crude oil soared to its zenith in 2023 throughout August, a trend that has endured into September. However, it is worth highlighting that the United States Federal Reserve may derive a modicum of solace from the continual descent in the core inflation rate, which has now reached its most sluggish pace since mid-2021.
The forthcoming September policy conference of the Federal Reserve looms on the horizon, and widespread consensus suggests that the central bank will maintain its prevailing benchmark fed funds rate at the range of 5.25% to 5.50%. The spotlight will soon pivot towards the Federal Reserve’s subsequent meeting, scheduled to commence at the outset of November. At present, market indicators imbue this event with approximately a 40% likelihood of policymakers opting for a rate hike, in accordance with the assessments derived from the CME FedWatch Tool.