August CPI Prints Hotter at 0.4% While Core Rate Holds Steady

Version 1 – Straight Market Recap

U.S. inflation came in hotter than expected in August, briefly pressuring risk assets, though traders still anticipate a Federal Reserve rate cut next week.

The Consumer Price Index rose 0.4% on the month versus estimates of 0.3%, while the annual pace ticked up to 2.9% from 2.7% in July. Core CPI rose 0.3% in line with forecasts, holding steady at 3.1% year-over-year.

Bitcoin slipped about 0.5% to $113,700 following the data, while stock index futures pared gains, now up just 0.1%. Treasurys rallied, with the 10-year yield down five basis points to 4.00%, the dollar edged higher, and gold turned positive at $3,675 an ounce.

Initial jobless claims, reported simultaneously, jumped to 263,000 versus expectations for 235,000 — signaling a softer labor market. The mix of sticky inflation and weakening employment underscores the Fed’s policy dilemma. Markets now overwhelmingly expect a 25-basis-point cut, ruling out the larger 50-basis-point move that some traders had speculated on earlier in the week.

Version 2 – Analytical Tone

August inflation data reaffirmed the Fed’s difficult balancing act: price pressures remain elevated while jobless claims point to softening employment.

Headline CPI rose 0.4% month-over-month, above July’s 0.2% and slightly higher than consensus. Year-over-year inflation held at 2.9%, while core CPI came in at 0.3% monthly and 3.1% annually — both exactly in line with forecasts.

Bitcoin dipped 0.5% after the release, while equities trimmed gains and Treasury yields fell sharply. The drop in yields reflected not just the CPI report, but also weekly jobless claims, which surged to 263,000, far worse than the expected 235,000.

Markets continue to price in a strong likelihood of a 25-basis-point cut at the Fed’s September meeting, but the hotter inflation print has diminished prospects of a half-point move.

Version 3 – Quick Newswire Style

U.S. CPI rose 0.4% in August, topping estimates of 0.3%, with annual inflation at 2.9%. Core CPI held steady at 0.3% month-over-month and 3.1% year-over-year.

Bitcoin fell 0.5% to $113,700, stocks pared gains to 0.1%, gold edged higher to $3,675, and the 10-year yield sank five basis points to 4.00%.

Weekly jobless claims surged to 263,000, well above expectations, adding pressure to the Fed’s policy path. Markets now see a 25-basis-point cut as almost certain, with odds of a 50-basis-point move fading.