Yesterday CPI Data

The most important number of the day wa CPI number. Inflation in August declined to its lowest level since February 2021, according to a Labor Department report Wednesday that also showed a key measure higher than expected, setting the stage for an expected quarter percentage point rate cut from the Federal Reserve.
Indeed, while the headline CPI increased 0.2% for the month, in line with the Dow Jones consensus, the core CPI, which excludes volatile food and energy prices, increased 0.3% for the month, slightly higher than the 0.2% estimate.

The slight uptick in core CPI keeps the Fed on defense against inflation, likely negating the probability of a more aggressive interest rate when policymakers meet next Tuesday and Wednesday.

Here are the details:
-> CPI 0.2% MoM (or 0.187% unrounded), Exp. 0.2% - in line
-> CPI Core 0.3% MoM (or 0.281% unrounded), Exp. 0.2% - hotter than expected. Note that was the 51st straight month of MoM increases in Core CPI, and a new record high.

The annual prints:
-> CPI 2.5% YoY, Exp. 2.5% - in line. The annual CPI increase is the lowest since February 2021...
-> CPI Core 3.2% YoY, Exp. 3.2% - in line

Last, but not least, and perhaps most ominous of all, is that while the Fed is about to start cutting rates , Supercore CPI rose 0.33% MoM (see chart below), the biggest monthly increase since April, driven by continued acceleration in transportation services, which jumped the most in 5 months.