"Month to month inflation readings can be noisy. That's why many of us have been warning against complacency on inflation despite favorable inflation data in recent months. August's Consumer Price Index (CPI) Report is a reminder that inflation seems to be stabilizing at an elevated level relative to the Fed's stated 2% inflation target. Month over-month core CPI jumped to 0.3%, the highest monthly reading since April 2024. The principal driver of the increase in inflation was housing, which is increasing at an annualized rate of approximately 6%, and shows little signs of deceleration. This CPI Report should quash any chance of a 50 basis point rate cut when the Federal Reserve meets next week. And it is a reminder that beginning a cutting cycle at all is a significant risk given inflation is still too high.”
- Dan Katz, Manhattan Institute Fellow.
Katz previously served as a senior advisor at the United States Department of the Treasury. He has published widely on economic policy, international affairs, and financial markets in City Journal, The Wall Street Journal, Bloomberg, the Financial Times, Barron’s, National Review, The Hill, and the Center for Strategic and International Studies. For a list of his previous writing at the Manhattan Institute, click here.
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