Will the Federal Reserve lean toward staying on hold in September? It all hinges on next week’s CPI data

Next week’s August Consumer Price Index (CPI) and Producer Price Index (PPI) to be released by the U.S. Bureau of Labor Statistics will be key in determining his final vote. If August inflation data shows a rebound, indicating that progress toward the 2% target is being hindered, there will be no dismissal of the possibility of supporting a “modest adjustment” to interest rates, to ensure inflation returns to a downward track.

Data released by the U.S. Department of Labor on Thursday showed that, for the week ending August 29, initial jobless claims rose to 206,000, slightly higher than the market expectation of 205,000, reaching a new high since mid-August. At the same time, continuing claims also edged up to 1.779 million. The marginal increase was seen by the market as evidence that the labor market is cooling moderately, helping to ease pressure for the Fed to tighten further.

New York Fed President Williams has also recently expressed affirmation about progress in curbing inflation. For now, even though the macro environment under President Trump faces uncertainty from trade policy and geopolitical conflicts, market expectations for a September rate hike have clearly cooled.

Markets are closely watching next week’s CPI report, which will be the most critical reference indicator before the Fed enters its blackout period.

I have long predicted that the Fed will not raise rates in September. The CPI data report next week should come in slightly softer than market expectations, keeping interest rates unchanged!
$BTC

$XAU

$COPX.ETF