The Dow Jones (DJIA) opened Thursday’s trading session in positive territory and has continued to trade higher, shrugging off new data that pointed to growing inflation.
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August’s Consumer Price Index (CPI) grew by 0.4% month-over-month, above the consensus estimate of 0.3% and registering the highest growth since January. CPI grew by 2.9% on an annual basis, in line with the estimate and rising from 2.7% in July.
Core CPI Holds Steady as Inflation Remains Above Fed’s Target
However, core CPI was tamer, remaining unchanged from 0.3% in July and matching the estimate. It notched 3.1% year-over-year growth, also matching the estimate and holding steady from July. Core CPI excludes volatile food and energy items.
The data points suggest that price increases from the Trump administration’s tariffs could be making their way to consumers. In addition, inflation remains above the Fed’s long-term inflation target of 2.0%. That hasn’t affected the odds of a rate cut at the September 16-17 Federal Open Market Committee (FOMC) meeting, which remain at 100%, according to CME’s FedWatch tool.
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