The September US CPI report reflects a slowdown in price pressures for the month, but annual headline and core inflation readings were still hotter than expected.
The headline CPI rose another 0.2% on a monthly basis, slightly above the expected 0.1% rise, while the core CPI posted a monthly gain of 0.3% versus the expected 0.2% increase. This resulted in the annual headline CPI falling from 2.5% to 2.4%, higher than expectations of 2.3% and still above the central bank’s target of 2%.
Link to the official US CPI report (September 2024)
Fundamental components revealed that the gains were driven by a 0.2% monthly increase in shelter costs and a 0.4% rise in food prices while the energy index fell by 1.9% during the month.
the CME FedWatch tool It showed an 84.4% chance of a 0.25% rate cut at the next Fed meeting, up from an 80.3% chance the day before, as traders see lower odds of another 0.50% cut in borrowing costs.
Market reactions
US dollar against major currencies: 5 minutes
Overlay of the US dollar against major currencies Chart by TradingView
The US dollar began to experience additional volatility in the hours leading up to the release of the US CPI, and fluctuated this way and that after seeing the actual numbers.
Although the results were in the green, the US currency continued to decline against the yen and the franc while also falling briefly against the rest of its peers, with the exception of the Canadian dollar.
From there, the dollar rose against its higher-yielding counterparts about an hour after the CPI numbers were released and then proceeded to fall again toward the end of the trading session.