Stubborn core inflation means the Fed's unlikely to slash rates by 50 basis points. Markets will cope.
This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribein August, the Bureau of Labor Statistics reported, in line with the Dow Jones consensus. The 12-month inflation rate was at 2.5%, the lowest since February 2021. However, core CPI, which excludes food and energy prices, ticked up 0.
The S&P dropped around 1% during trading but eventually managed to claw back losses and close more than 1% higher by the end of the day. It's the first time the broad-based index has done so since October 2022. Core inflation was higher than the headline number because food and energy prices are stripped out from the former. And both were mild for the month: Food prices were only 0.1% higher, suggesting no pets need to be eaten, while energy costs fell 0.8%.
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