US: Inflationary Pressures Show Further Signs of Heating Up in August

Economic

Forex

Summary:

The Consumer Price Index (CPI) rose 0.4% month-on-month (m/m) in August, a tick ahead of the consensus forecast in Bloomberg and up from the 0.2% m/m gain in July. On a twelve-month basis, CPI was up 2.9% (from 2.7% the month prior).

Energy costs (+0.7% m/m) turned higher last month, while food prices (+0.5% m/m) also firmed due to higher grocery costs (+0.6% m/m). Price growth for ‘food away from home’ was up 0.3%m/m – unchanged from July.

Excluding food and energy, core inflation rose 0.3% m/m (0.35% m/m unrounded), largely matching last month’s gain and meeting the consensus forecast. The twelve-month change held steady at 3.1%.

Price growth of services continued to come in on the hotter side, rising 0.35% m/m, following a similar gain of 0.36% m/m in July. Primary shelter costs rose at its fastest monthly clip in several months, while price growth of non-housing services (+0.4% m/m) remained firm for a second consecutive month.

Higher travel costs (+3.0% m/m) were a big driver of price growth in non-housing services, thanks to a sharp uptick in airfares (+5.9% m/m) and hotels (+2.3% m/m).

Tariff passthrough continued to materialize in core goods prices, which were up 0.3% m/m or its fastest monthly gain since January. Price gains were most notable in apparel (+0.5% m/m), appliances (+0.5% m/m), household furniture and bedding (+0.4% m/m) and new vehicle prices (+0.3% m/m). Used vehicle prices also rose 1.0% m/m, which could in part be driven by consumer switching to used models in an effort avoid paying tariff costs.

Key Implications

Inflationary pressures continued to heat up in August, with broad strength in goods and services inflation. Goods prices are likely to continue to drift higher over the coming months as businesses increasingly pass-on more of the tariff costs. However, further upward pressure on services inflation looks limited against the backdrop of a cooling labor market which is likely to limit upward pressure on wage growth and keep a lid on discretionary services spending.

But nothing is a guarantee, and policymakers will need to balance the risks of reducing the policy rate by enough to breathe some life back into the labor market, but not by so much that they risk unnecessarily stoking inflation. We see the Fed delivering on three quarter-point cuts by year-end, with the first coming at next week’s meeting. We’ve long held this view, and following this morning’s release, Fed futures are pricing in a similar rate-cut path by year-end.

Source: ACTIONFOREX

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Warren Takunda

Economic

NZD is in the red against the majority of its peers after the Reserve Bank of New Zealand (RBNZ) reiterated a committment to deliver two more interest rate cuts this cycle.

"NZD/USD edged lower to near 0.5940. RBNZ Governor Hawkesby reiterated that the bank forecasts the Official Cash Rate (OCR) to fall by another 0.5% to 2.5% by year‑end," says Samara Hammoud, an analyst at Commonwealth Bank of Australia.

Although Hawkesby added that the pace of further interest rate cuts will depend on incoming data and the speed of New Zealand's economic recovery, he made it clear he thinks the stale economy will facilitate the move.

The RBNZ estimates the economy contracted in the second quarter of 2025, but expects growth to resume in the second half of 2025 as household expenditure rises.

Further rate cuts at the RBNZ will likely weigh on the NZ Dollar going forward, particularly against currencies belonging to central banks that are less inclined to cut interest rates from here.

"RBNZ's dovish pivot deals a blow to NZD," says Jason Wong, FX strategist at BNZ, the New Zealand Bank. He explains the Reserve Bank of New Zealand's "dovish pivot" has driven domestic bond yields lower, contributing to the NZD's "laggard" status.

The 'dovish pivot' references the RBNZ's last policy decision, where it cut the Official Cash Rate (OCR) by 25 basis points to 3.0%, but two members of the board dissented from their four colleagues to vote for a larger 50bp cut.

This was the first such vote split in RBNZ history, and signals a clear belief by decision makers that more work must be done to get interest rates lower in order to support the economy.

The decision is a prime driver behind ongoing NZD underperformance, with the currency being the third-biggest loser of 2025, following behind the tariff-implicated U.S. and Canadian dollars.

"While the quarter point cut was no surprise, the catalyst for the move lower in NZD was the debate among the board members between a 25bp and 50bp cut, with two members voting for a 50bp cut. Acting Governor Christian Hawkesby mentioned that the sell-off in the NZD was anticipated and the central bank was comfortable with it," says a note from HSBC.

Source: Poundsterlinglive

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ING

Economic

Forex

Political

Good news for Lisa Cook as a court rules in her favour – but this is far from over

A few weeks ago, President Trump attempted to fire Federal Reserve Governor Lisa Cook for "cause". The identified "cause" was the alleged falsification of mortgage documents prior to her taking up the role of governor. There has been a court hearing on the matter, and we’ve just had the outcome, which is a positive one for Cook. Essentially, the court ruled that "cause" should reflect something done while actually in office, followed by the assertion that a firing based on "unsubstantiated and vague allegations" would "endanger the stability of our financial system". Cook keeps her job and gets to vote at the upcoming FOMC meeting.

But this is not over. The Justice Department is likely to appeal on the theory that even if Cooks' alleged falsification of documents is viewed as minor under some interpretations, it may still be sufficient grounds for removal. In the extreme, this could go all the way to the Supreme Court. And if it did, that court has tended to swing right. Either way, this whole affair does smack of a political agenda to make changes at the Fed by the Trump administration.

A burning question is why the markets have not reacted more negatively? After all, this does smack of political interference. Part of the explanation could lie in the perception that the allegations - while unproven - retain a degree of plausibility in the eyes of investors, at least until definitively dismissed. Some investors may also trust the courts to uphold due process, reinforcing faith in institutional safeguards.However, if Chair Jerome Powell were to get involved as an obstacle, say, for attempting to protect Cook, and were fired on that basis, that would be a whole different story. Take us there, and the market would react more dramatically. In the end, any extreme action taken to undermine Fed independence would be viewed with much suspicion by longer-dated bonds.

The front end does not care about longer-term risks, as it is slavish to where the funds rate goes. By definition, it cannot think beyond two years. But the back end is a deeper thinker, and can worry about second- and third-round effects, and especially on medium-term risks potentially being taken on inflation should the interference with the Fed be seen to be swinging policy too dovish.

This has the potential to get very messy, and could finally tip the back end over the edge – an edge it has thus far resisted crossing, even under significant fiscal pressure. How messy? It's tough to say, but we'd more than likely comfortably take out the previous 10yr and 30yr yield highs seen in this cycle.

Upcoming rate cuts have little to do with the Lisa Cook case, but beyond that this theme is potentially extremely relevant

In the wake of the latest round of weak jobs data and a downbeat assessment on the economy from the Federal Reserve’s own Beige Book report, the market is now convinced the Fed will soon resume cutting interest rates. While this is mostly aside from the Lisa Cook saga, the market’s hunger for cuts has been further fuelled by the prospect that the Fed is set to lean more dovishly in the months ahead as Donald Trump seeks to appoint new members who are more aligned with his thinking that interest rates need to be much lower than they are currently.

The anticipated changes in personnel at the Fed mean there is a perception in the market that the “new” Fed could be seen to be more willing to put the political goals of the president ahead of economic stability, similar to when Richard Nixon pressured Arthur Burns into cutting interest rates ahead of the 1972 election. In combination with a lifting of wage and price controls, this contributed to a spiralling of inflation in subsequent years.

Nonetheless, it is important to point out that no potential Fed candidate has endorsed the president’s call for 200-300bp of immediate interest rate cuts.Stephen Miran is set to be in position for the 17 September FOMC meeting, temporarily filling the governor role vacated by Adriana Kugler after she decided to step down early. Miran has somewhat controversially refused to resign from his current role as chair of the President’s Council of Economic Advisors. Instead, he is taking a temporary period of unpaid leave, raising questions about how independent he can be, given that he will be returning to work for the president in early 2026.

It will then be up to President Trump to name a permanent successor to Kugler, and with the future of Lisa Cook in doubt, plus Jerome Powell’s term as Fed Chair ending in May 2026, the composition of the FOMC will soon look very different to how it started 2025. Nonetheless, we must remember the FOMC is a committee made up of 12 voting members, and while any new members joining in the coming months may be in favour of lower interest rates right now, given the current economic conditions, there is no guarantee that will be the case if the economic situation changes.

Financial markets will also provide a stiff test for new officials. In the UK, the reason that the then newly elected Labour government gave the Bank of England independence in 1997 was to give the new political administration more economic credibility. It was believed that an independent central bank gives financial markets greater confidence that inflation would be more stable at lower levels, and this reduced term premium, which helped deliver lower market interest rates and stronger economic growth than would have been otherwise achieved. If global markets started to question the credibility of US economic policy, this could risk higher borrowing costs and slower growth, which would not be in the president’s best interests as we head towards the mid-term elections.

Source: ING

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Adam

Commodity

Market Overview

WTI crude oil held near $63.55 per barrel on Thursday, extending a three-day advance as geopolitical tensions raised concerns over potential supply disruptions.

Traders balanced this risk premium against U.S. data showing a 3.9 million barrel rise in crude inventories, a sharp increase above expectations that signaled weaker seasonal demand.

Market sentiment was also shaped by speculation of a more dovish Federal Reserve, with looser monetary policy expected to support growth and energy consumption. Overall, crude prices remain caught between rising geopolitical uncertainty boosting supply fears and inventory pressures tempering the outlook.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Natural gas is trading near $3.03, showing signs of stabilizing after testing support at $3.00. On the 1-hour chart, the price has pulled back from the upper boundary of its rising channel and is now consolidating near the midpoint. The 50-EMA at $3.06 and the 200-EMA at $3.04 are acting as resistance, keeping upside momentum in check.

The RSI at 38 suggests bearish pressure but also hints that conditions are approaching oversold levels. If buyers defend the $3.00 support, price could rebound toward $3.11 and $3.16, with a breakout extending toward $3.22.

A clean break below $3.00, however, would weaken the channel structure and expose the next downside target at $2.87.

WTI Oil Price Forecast

WTI Price Chart

WTI crude oil is trading near $63.55, holding steady after testing the rising channel support. On the 1-hour chart, price is sitting above both the 50-EMA at $63.30 and the 200-EMA at $63.40, showing short-term stability. The channel pattern highlights support around $62.94 and resistance near $64.07. If momentum continues, a push toward $64.52–$65.08 is possible.

The RSI at 53 signals neutral momentum, suggesting neither side is in control. Candles show smaller bodies after the recent rally, pointing to consolidation.

A break below $62.94 could trigger a move toward $62.45 and $61.94, while holding above current support keeps the bullish channel intact. For traders, this area is key for direction in the next session.

Anyone seeking to strengthen their edge in oil and gas trading can benefit from Why And How To Trade Commodities: A Complete Introduction.

Brent Oil Price Forecast

Brent Price Chart

Brent crude is trading near $67.43, holding above its short-term channel support. On the 1-hour chart, price has broken out of a descending channel and is now following an ascending channel, suggesting improving momentum. The 50-EMA and 200-EMA, both at $67.05, are acting as a strong support base.

Immediate resistance is seen at $67.78 and then $68.43, with a successful breakout paving the way toward $69.12. On the downside, support rests at $66.36 and $65.86.

The RSI at 57 points to steady bullish pressure without being overbought. If buyers defend the $67.20–$67.00 zone, Brent could extend its climb toward the upper channel. A break below $66.36, however, risks weakening the setup.

Source: fxempire

Risk Warnings and Disclaimers

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Warren Takunda

Stocks

London stocks had extended gains by midday on Thursday as investors eyed the latest US consumer price inflation reading.

The FTSE 100 was up 0.6% at 9,276.18.

The US consumer price index for August is due at 1330 BST. Investors will also be watching out for the latest policy announcement from the European Central Bank, with no change to rates expected.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the FTSE 100 was "tracking the positive sentiment felt across global markets after US producer prices rose at a slower pace than expected".

"The S&P 500 notched yet another closing all-time high, buoyed by optimism after softer producer price data reinforced hopes that inflation is cooling - but the rally wasn’t at full steam," he said.

"Stocks faded through the session on heavy volume as investors questioned whether valuations have run too far ahead of this afternoon’s CPI print, underscoring a market still balancing optimism with caution.

"Headline US consumer inflation (CPI) is expected to tick up to 2.9%, the highest since January. A hotter-than-expected number could reignite rate fears and test the market’s lofty valuations, while an inline or softer print may reinforce the ‘Goldilocks’ narrative that’s been powering equities to record highs. Core inflation holding steady at 3.1% will be key for gauging how sticky underlying pressures remain."

On home shores, the latest residential market survey from the Royal Institution of Chartered Surveyors showed that house prices softened in August as economic uncertainty weighed on the market.

The survey showed that agreed sales were also down, alongside a slowdown in new buyer enquiries.

The house price balance fell to -19 from -13 and -7 in July and June respectively, with respondents expecting further falls over the coming quarter.

The new buyer enquiries balance softened for the second month in a row, to -17 from -7, while agreed sales slid to -24 from -17.

There were also fewer fresh listings, with new vendor instructions easing to -3 – the first negative reading since June 2024.

Tarrant Parsons, head of market research and analysis at Rics, said: "With buyer demand easing and agreed sales in decline, the housing market is clearly feeling the effects of ongoing uncertainty.

"Concerns over the wider economic and fiscal outlook, combined with questions around the future path of interest rates amid stubbornly high inflation, are weighing on sentiment at this time."

In equity markets, defence firm BAE Systems was the standout performer on the FTSE 100, while Babcock also gained.

Russ Mould, investment director at AJ Bell, said: "Ongoing geopolitical tensions have led investors to have confidence in the defence sector, believing earnings prospects are strong given a fragile backdrop. BAE Systems’ share price has risen by 45% over the past 12 months and up 271% over five years."

Online ticketing platform Trainline surged as it said it expects full-year earnings to be at the upper end of guidance after an 8% jump in interim sales driven by strong traffic in the UK and Europe and also unveiled a £150m share buyback.

The company now expects adjusted core profits to grow at the top end of its previous guidance range of between 6% and 9%. Group net ticket sales increased to £3.2bn, near the top of expectations.

Playtech was also sharply higher as it said it was on track to deliver FY 2025 adjusted earnings before interest, tax, depreciation and amortisation ahead of expectations after a strong first half.

On the downside, M&G, Intertek and Greggs all fell as they traded without entitlement to the dividend.

Source: Sharecast

Risk Warnings and Disclaimers

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Michelle

Forex

Economic

路透社对 107 位经济学家的调查显示，几乎所有经济学家都表示，由于劳动力市场疲软掩盖了通胀风险，美联储将于 9 月 17 日将基准利率下调 25 个基点，其中大多数人预计美联储下个季度将进一步下调利率。

8月份就业增长停滞，以及截至3月份的12个月就业数据大幅下修，导致许多经济学家修改了预测，降息幅度超出了之前的预期。市场已完全消化了9月份的降息预期，目前预计今年将降息三次，而几周前仅为两次。尽管存在与关税相关的通胀风险，美联储主席杰罗姆·鲍威尔和其他政策制定者已暗示将放松货币政策。

9月8日至11日路透社调查的107位经济学家中，有105位预测，美联储下周将年内首次降息25个基点至4.00%-4.25%。上个月，61%的多数经济学家曾预测美联储将降息。

摩根士丹利首席美国经济学家迈克尔·加彭表示：“美联储目前有四个月的证据表明劳动力需求放缓，而且这种放缓似乎具有更强的持久性……简而言之，忽略当前的通胀水平，放松政策以支持劳动力市场。”

“我们认为9月份降息25个基点的可能性比大幅降息的可能性更大。”

其中两位分析师预计降息幅度为 50 个基点。

总统唐纳德·特朗普多次批评鲍威尔不愿降息。

特朗普提名的美联储理事斯蒂芬·米兰可能无法在下周的会议前及时加入董事会，而理事丽莎·库克在总统试图罢免她之后，根据法院的裁决继续留任。

许多经济学家表示，一些联储局成员下周可能会持不同意见，投票支持更大幅度的降息或维持利率不变。美联储理事克里斯托弗·沃勒和米歇尔·鲍曼反对在7月份维持利率不变。

“现在的政策制定环境非常困难。如果出现更多异议，我不会感到惊讶。”美国银行经济学家史蒂芬·朱诺表示。

“如果美联储大幅降息，以至于他们过于依赖以下说法——劳动力市场存在显著的下行风险，而他们不必担心通胀上行风险——那么我们就会陷入一种更像是政策失误的境地。”

60% 的受访者（107 位中的 64 位）预计到 2025 年底利率将下降 50 个基点，但 37% 的受访者预测到年底利率将下降 75 个基点，较 8 月份的 22% 大幅上升。

回答附加问题的 42 位经济学家中，有 26 位（超过 60%）表示，未来一年更有可能出现通胀飙升或通胀与失业率快速上升并存的情况。调查发现，预计通胀率至少在 2027 年之前都将保持在美联储 2% 的目标水平之上，而失业率预计将在未来几年徘徊在目前的 4.3% 左右。

周四晚些时候，官方数据预计将显示上个月消费者价格通胀加速。

不过，民意调查中值显示，美联储明年将再次降息 75 个基点，使联邦基金利率达到 3.00%-3.25%。

美国银行的朱诺补充道：“如果我们迎来一位更为鸽派的美联储主席（我们大概会遇到这种情况），我们确实认为美联储将在明年下半年再降息 75 个基点。”

“您愿意降息到什么程度？以及愿意降息到什么程度？这将是下一任美联储主席面试的一个关键问题。”

约 76% 的经济学家表示，他们预计在鲍威尔 5 月份任期结束期间，美联储的独立性不会受到严重削弱。

资料来源：路透社

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Adam

Economic

Let's start with the expected figures. As always, the core estimates are the most significant ones to pay attention to. And in the August report later, the consensus is for core CPI to come in at +0.3% m/m. That is the same as July. But if you drill down to an added decimal point, the expected is +0.32% m/m for August - which is also what we saw with the July report.

Meanwhile, core CPI from an annual basis is expected to come in at +3.1% y/y. That is again the same as July once you round up but the extra decimal point makes for +3.10% y/y for the August estimate as opposed to +3.06% y/y for July. So, that is the consensus expectation going into the report release later.

However, what do the other numbers say?

In July, we did see an acceleration in core prices but it was mostly driven by services instead of goods. That helped to give markets some sense of relief that the tariffs passthrough is not quite yet that impactful. So, what can we expect today?

For one, base effects are expected to help with a rebound in energy prices which declined by 1.1% m/m in July. MNI estimates are for a bump up by 0.8% this month. Food prices are also expected to move up on the month, so just keep that in mind.

But the most important detail will be to look at core goods prices. And the expectation is for that to come up higher again, with MNI estimates at +0.30% m/m. That will be up from the +0.21% m/m reading in July, which was below consensus expectations.

With markets already fully pricing in a 25 bps rate cut for next week, the question will be is there enough evidence - or should I say lack thereof - today to lean towards chasing a 50 bps rate cut? That will require the inflation numbers to fall below estimates with again another month of underwhelming core goods prices.

In other words, that will translate to another month where the tariffs passthrough on prices has yet to meaningfully materialise.

By year-end, traders are pricing in ~68 bps of rate cuts. And if there is a flip side where the inflation numbers run hotter than expected, we should see traders reprice this one. A move in September looks to be a given but traders are not fully convinced of a more aggressive move for next week. So, that also casts some doubt about the Fed needing to move consecutively in September, October, then December.

As such, if there is reason to pull back on rate cuts pricing, expect it to show up in the pricing by year-end and not so much so for September. However, the numbers today could tee up how the Fed wants to set up their communication for next week.

I'll be back with some analyst previews in just a bit.