The 0.6% m/m increase in core consumer prices in August, double the consensus expectation, confirms that the Fed will hike its policy rate by at least 75bp next week. Nevertheless, that outsized monthly gain in underlying prices, which took the annual core inflation rate up to a new cyclical high of 6.3%, from 5.9%, is somewhat hard to square with all the other evidence pointing to signs of price pressures easing. We can see disinflation everywhere except in the official CPI statistics.
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