Close Navigation
Learn more about IBKR accounts

Inflation Spikes Beyond Forecasts To 3.7% In August, Forces Markets To Rethink Fed Policy

Posted September 13, 2023
Piero Cingari
Benzinga

Wednesday brought an alarming inflation surge that has left economists and financial markets in a state of surprise, as the Consumer Price Index (CPI) awakened vigorously last month from a year-long hibernation.

Inflation Surges Beyond Expectations In August

  • The annual CPI inflation rate soared from 3.2% in July to a notable 3.7% in August 2023, surpassing economist expectations of a 3.6% increase.
  • On a monthly basis, the CPI accelerated sharply, rising by 0.6% in August, a stark contrast to the 0.2% increase seen in July, but in line with expectations. This marked the sharpest monthly CPI increase since June 2022.
  • When energy and food items are excluded from the basket, the core CPI showed a different picture. It decreased from July’s 4.7% to 4.3% year-on-year in August, matching economists’ predictions.
  • The core CPI’s monthly increase was 0.3%, advancing from July’s 0.2% figure, and above than the expected 0.2%.

Market Reaction, Fed Speculation

The August CPI data, released by the Bureau of Labor Statistics, has come in hotter than anticipated, fueling concerns about the Federal Reserve’s future actions.

Prior to the release of the CPI data, the market had been pricing in a 93% probability the Federal Reserve would refrain from raising interest rates during its Sept. 20 meeting. Additionally, there was a 58% chance that rates would remain unchanged in November.

Originally Posted September 13, 2023 – Inflation Spikes Beyond Forecasts To 3.7% In August, Forces Markets To Rethink Fed Policy

Join The Conversation

If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.

Leave a Reply

Your email address will not be published. Required fields are marked *

Disclosure: Benzinga

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Benzinga and is being posted with its permission. The views expressed in this material are solely those of the author and/or Benzinga and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.